Is Rental Car Insurance Really Needed?

If you are gearing up for a trip or you need a replacement vehicle to drive around your town, you may be wondering if you should elect to purchase the supplemental car insurance that is offered to you when you are standing at the rental car counter. There is a lot of confusion surrounding rental insurance and how it differs from standard automobile insurance. If you are wondering about the differences between rental insurance and automobile insurance, and whether or not rental insurance is a must, read on and learn everything that you need to know.

Between Rental Car Insurance vs. Standard Auto Insurance

Rental insurance is a specialty form of insurance that is sold over-the-counter to consumers who are paying a rental fee to drive a vehicle that they do not own. This specialty form of insurance may act as a physical damage waiver, which will cover any accidental damage sustained to the vehicle during the rental period in exchange for a daily premium. Some rental insurance will also provide drivers with liability coverage, which will pay a third-party for injuries or damages for which any listed driver on the rental contract is responsible.

A standard auto insurance policy is designed to cover vehicles that you own, and the vehicles will be listed on the policy. The terms of the policy may also extend coverage to a rented vehicle, a replacement, or a borrowed vehicle. Any coverage you carry on your listed vehicles will then extend to covered replacements or temporary vehicles. This includes physical damage coverage and liability. Vehicle owners with standard auto insurance will pay monthly premiums rather than high daily rates.

Alternatives to Buying Rental Car Insurance

Now that you know the difference, you may be wondering if rental car insurance is really necessary. When you request a quote for this supplemental insurance, you may be astonished to learn that opting-in can raise your contract cost by hundreds of dollars, depending on the length of the rental period. The typical auto policy will extend to a rental car, but you should ask your agent if your policy will cover a rental car before relying on your insurance. It is also important to realize that you will be responsible for your deductible if you file a claim on your own auto policy. If you do not have full coverage, physical damage will not be covered.

Another alternative that will not land you a premium surcharge if you file a claim is opting for coverage through your credit card company. Many companies offer benefits like rental car coverage if you pay for the rental using the card. Be sure to read the stipulations, and find out if your credit card company acts as a form of secondary coverage. If the coverage is secondary in nature, it can be used to pay for your standard deductible for collision and comprehensive claims.

It is very important to read the fine print before you reject rental insurance. If you have no insurance at all, buying rental insurance can protect you from being forced to pay for repairs and bills out-of-pocket. If you do have insurance, find out how your coverage extends and how your credit card provider can help in the event of a claim.