Do You Need Rental Car Insurance?

“Do I need rental car insurance?” is a common question, and the definitive answer is a resounding:  Maybe.  The majority of people who rent a car will not need to purchase car rental insurance from the rental agent, and here are the reasons why you may not have to, either:  First, you may be covered by your own car insurance, and second, you may be covered by the credit card you use to pay for your rental.

The simple way to find out is by making a couple of phone calls.  Call your insurance company’s toll-free number, and ask the agent whether or not your own policy covers rentals.  However, don’t rely on a verbal acknowledgement, ask the representative to either confirm by e-mail or by facsimile; you want the answer in writing, just in case.  If you rent cars often, you might want to consider purchasing additional coverage that would explicitly cover car rentals, and would extend both collision and comprehensive coverage. 

If you don’t have coverage under your own separate car insurance policy, call the toll-free number on the credit or charge cards that you hold, and ask the same question; again, you want an affirmative answer in writing, just in case.  You should ask about dollar limitations in coverage, and whether the coverage applies to any car rental agency.  Bear in mind, certain credit cards may limit the amount of days, or the type or class of car you can rent.  Still other cards require that you pre-enroll with their rental car insurance program.

Diners Club and American Express both have rental car collision damage coverage; they merely require that you decline the offered insurance, and sign or initial the declination statement.  It’s important to note, that collision damage insurance still leaves you exposed to property damage to other individuals or vehicles as well as bearing the cost of injury to yourself.  While you might think it would be a good idea to have additional coverage, by accepting the car rental insurance you invalidate the free one provided by the credit card company.  In most instances, you should also be aware that you must pay the entire fee with a single card; you cannot split between them.

If either of those options is not viable for you, and you think you might want to accept the rental agency’s insurance, you might want to think again.  Often, that insurance provides coverage against rental car theft, but does not include the contents of the car, and there may be specific exclusions under certain circumstances.

A final option is to purchase non-owners car insurance.  This is ideal if you don’t own a car but regularly rent or borrow a car.  Non-owner policies vary among the providers, but generally include liability coverage, reimbursement for medical payments, and uninsured or underinsured motorist coverage.  It’s a very good alternative to purchasing rental car insurance.