Insuring yourself in a Rental Car         

It was a long flight and you’ve just arrived at your destination for your dream vacation. You’re tired and a bit jet lagged and all you want to do is get to your hotel. When you go to pick up your rental car however, the salesperson asks you “Would you like to buy our insurance plan that covers any damage that might occur to the vehicle while you are using it?”

Many car rental employees are coached to push their insurance hard and can get rather aggressive with it because this is another great source of income for them. So before you go on your trip, be prepared with the following information:

Does my Auto Insurance Policy extend to cover damage to that rental car?

The short answer is: Yes. The coverages that you have on your auto policy will extend to a rental car unless

-You are renting a large truck like a U-haul.

-You are renting the vehicle outside the US or Canada

-You do not currently have Comprehensive and Collision coverage on any vehicles on your Auto Insurance Policy.

If none of these apply, then the next question is-

Should I still buy the rental car company’s insurance they are trying to sell me?

While that is a personal choice, we generally suggest that you do for two reasons-

  • If you get into an accident and have to report it on your own insurance policy, it will go on your record and can affect your rate at renewal.
  • Rental car companies will often charge you for the time their vehicle is out of commission which your insurance company may or may not pay for.

I’ve heard that credit card companies will cover it – is that true?

It may be true.  You would need to call the credit card company that you plan to pay for the car with and ask.  Many of them do provide coverage, you just need to ask.  Be sure you are clear with what they cover, it may be everything or there may be gaps!

Before you make a decision, take into consideration how rental car companies operate and also pay attention to the waivers you sign with them.

One of our clients recently flew back to North Carolina for her mother’s funeral. She rented a car there and when she went to turn the car back in, they noticed a new dent on the side of the car. She had no idea how it happened and felt that it may have actually been preexisting. She did not want to file a claim on her insurance and told the staff at the rental car company that she did not feel she should be liable for the damage. They told her they would escalate it to a supervisor who would call her to discuss options. By the time her plane landed in Seattle later that day, the rental car company had already charged her credit card over $800 for the cost of the repair. She was able to call her credit card company and get them to stop the payment, but at that point she had to choose between filing a claim, paying out of pocket, or being sent to collections by the rental car company.

Ultimately the choice is yours whether to accept the cost of the extra insurance or not. Personally, I will happily pay for the extra coverage on my next vacation. It’s just not worth the headache should something go wrong!]]>