If you’ve ever had to rent a car, you’ve probably been asked by the rental car company if you would like to purchase rental insurance on the vehicle. You decide to play it safe and say yes, but is supplemental rental insurance actually necessary or is it just an added expense?
Check Your Car Insurance Policy
Before purchasing the rental insurance provided by the rental company, look into your own car insurance policy. Many policies cover a rental car as well. In some instances, insurers will cover the vehicle rather than the driver. That would mean if you had a friend drive your car home and they got into a fender bender, they would be covered under your insurance policy. It’s always worth a call to your agent to find out exactly what insurance coverage extends to a rental vehicle.
It is important to note that this may only apply if you are using this vehicle for personal use. If the car is being rented for business, it may not be covered under your car insurance. If it is for business use, check with your company to see if they have any policies to cover rental cars or if they will pay for the rental insurance.
What does my insurance cover?
Deciding to purchase supplemental insurance should be decided on the level of coverage. Maybe your insurance covers everything? Maybe your insurance only covers a portion. If it only covers some, you might find it beneficial to purchase more. Here's a quick look at what typically falls under your own car insurance.
Liability Coverage
Pays for another person's medical bills or car repairs if you are found at fault in an accident.
Comprehensive Coverage
An extension of coverage that will fix your car or rental car if it is damaged as a result of a fire, natural disaster, theft, or vandalism.
Collision Coverage
So, liability covers the repairs of the other car, but if your rental was damaged while at fault the collision coverage would help with repairs. It also kicks in if your rental car was ruined because you collided with a fence, lamp post, or another object that was not a vehicle.
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What comes in the insurance from the car rental?
Liability
All states require a form of liability coverage, and you can expect the rental's insurance to offer you something here. If your liability coverage is large enough through your own provider, you might not need to take out more.
Collision/Loss Damage Waiver
Signing the waiver isn't an agreement to more coverage. Instead, if you sign these documents, it might assist you from being responsible for paying for repairs if the car is damaged.
Personal Effects Coverage
This elective coverage isn't typically found in car insurance, so you might want to give it some thought. Any of your belongings that are stolen from the rental might be replaceable under the personal effects portion.
Personal Accident Insurance
"Personal accident" will help cover medical bills for either yourself or a passenger in the event either of your sustain injuries. Check this coverage with your current insurance. There might be some overlap.
Check With Your Credit Card Company
Some credit card companies provide rental car coverage. This may seem unexpected, but the top four major credit card companies, MasterCard, Visa, Discover, and American Express all offer some rental car coverage.
Typically, you are required to pay for the rental car entirely on your credit card and deny their supplemental insurance to qualify. If you do purchase the supplemental insurance, you will not be covered by your credit card company.
There are a lot of exceptions to what they will cover like certain types or models of vehicles. Before purchasing the supplemental insurance, read up on what your credit card company would cover for you and make sure your credit limit allows you to put the entire expense of the car on that card.
You may ultimately decide that the best option is to purchase the supplemental insurance provided by the rental car company but make sure you’ve looked into all your other options first.
If you've been injured in a car accident, contact Bart Durham today to see if you have a case.
