Rental Car Insurance Coverage: Do You Need It?

March 15, 2009

When you rent a car do you automatically buy rental car insurance? Did you know your rental car may already be covered through your car insurance policy?

Avoid Buying Duplicate Car Insurance Coverage
When you are thinking about renting a car, say for your next vacation or to visit Grandma, first talk to your car insurance company and see how much coverage you have. Many times the coverage and deductibles you have on your personal car will transfer to your rental car, if you are using it for pleasure.

The exception to this is the Collision Damage Waiver, or CDW. This is an extra daily fee which covers “loss of use” should you get in an accident. Basically, this is the time the car is being repaired and can not be rented out, which costs a rental company money. This coverage is not likely to be included on your personal car insurance policy so it may be a good idea to pay the $9-19 a day fee for the CDW.

Note: If you are renting a car in another country, your personal insurance coverage probably will not extend to a car rental. In this case, your best option is to at least buy the Collision Damage Waiver (CDW) from the rental agency.

Credit Cards and Car Rental Insurance Coverage
If you have a credit card, and who doesn’t nowadays, you may already have rental car insurance. Check with your credit card company and see the types and amounts offered. And if you have more than one credit card, call each one so you get the best coverage. It is important to note that most credit cards only cover basic car models, so if you upgrade to a luxury car or SUV you might not have this coverage. Also, ask your credit card company if it covers the “loss of use” that the rental car company will charge if you damage the car.

When the Car’s in the Shop
The world doesn’t stop because your car is in the shop. If you had to rent a car while yours is being repaired because of an accident or other covered loss, many car insurance companies will pay you back for the rental car costs. You may already be paying for this coverage, especially if it is an optional/add-on to your car insurance policy. Check with your carrier to make sure.

Before you get to the rental car counter, check with your car insurance carrier— you may be surprised to see what is already covered by your car insurance policy. And if your policy doesn’t have rental car coverage, or if you are paying too much, compare car insurance quotes in the AskPatty Insurance Center.

Gina M. Scott is a Web writer and blogger for InsWeb. She has worked as a Web writer and journalist for three years, covering a variety of topics such as technology, government, and cyber security, since graduating from Sacramento State University with a BA in English—professional and creative writing. She now specializes in auto, home, term life, health and other insurance topics for www.InsWeb.com. Born and raised in Northern California, Gina enjoys traveling and creative writing.