Should I Get Rental Car Insurance?

Matthew Lloyd
February 22, 2021
Matthew Lloyd

should i get rental car insurance?

Should I Get Rental Car Insurance?

For some drivers, buying rental car insurance is a redundant expense, while for others, it's a necessity. Which category do you fall in?

Before you can decide whether you need rental car insurance, there're some things you need to take into consideration to make an informed decision. First, check if your existing auto insurance policy covers a rental car, then think about your risk of an accident relative to your car usage situation.

In this short comprehensive guide, we’ve highlighted different aspects of rental car insurance to help you decide if you need one.

Do Auto Insurance Policies Cover Rental Cars?

If you have personal auto insurance coverage, there are three primary coverage types from your policy that can extend to rental cars. The coverage limits and deductibles on your policy will also apply to a rental car.

1. Liability Coverage

This coverage helps you pay for someone else repairs or medical bills if you cause an accident in your car or rental vehicle.

2. Collision Coverage

If your car or rental collides with another vehicle or object, the collision coverage will pay for the repair if you caused the accident. The coverage also comes with a deductible.

3. Comprehensive Coverage

Comprehensive cover the repair cost of your rental vehicle in case it gets damaged by flood, natural disaster, or vandalism. Also, it covers vehicle theft. A comprehensive deductible will also apply here.

Does Your Credit Card Have Rental Car Coverage?

If your car insurance policy doesn't include rental coverage, check the type of coverage your credit card offers you. Most major credit card issuers offer extra insurance if you pay for your rental car using their card.

The credit cards offering rental car insurance include Visa, American Express, Discover, and MasterCard. Nonetheless, MasterCard still has several cards that don’t offer any form of coverage.

To ensure you’re covered by your credit card issuer, call the toll-free number on the back of the card and let them explain to you your options in detail. If you agree with the terms of the coverage, pay for your rental car with the card.

Another thing to keep in mind is that rental insurance from a credit card issuer often comes with restrictions. For instance, expensive or exotic cars, trucks with open beds, motorcycles, and off-road vehicles aren’t covered under many plans.

And some issuers like American Express don’t cover popular SUVs, including Chevy Suburban, Range Rover, and Ford Expedition. Visa and MasterCard don’t offer coverage for damages sustained on dirt or gravel roads. Other credit-cards don’t cover rims and wheels.

Types of Insurance for Rental Cars

When renting a car, you’re offered a chance to add up to four kinds of insurance covers. They include:

Collision damage waiver (CDW) or loss-damage waiver (LWD)

CDW or LWD is not insurance but a waiver in which rental companies agree not to make a claim if the rental gets damaged or stolen. It doesn’t involve any deductible if you’re renting the car in America, but if you’re renting it abroad, you might pay thousands of dollars.

This coverage usually costs anywhere from $10 to 30 per day, depending on the vehicle, the renting company, and the location you’re renting the car. And since it’s the moneymaker for rental car companies, rental agents are often required to push them. Frequently, this coverage excludes various conditions, including driving while impaired.

Liability insurance

It offers protection against damages on someone else's property or car that might arise from incidents occurring during your rental period. The insurance can cost anywhere from $7 and $15 per day.

Personal accident insurance

It’s designed to cover the medical expenses of you or any passenger when you get involved in an accident when having the rental vehicle. The coverage costs range between $1 to $7 per day.

Personal property or effects insurance

This insurance covers the property that is with you in the rented car. Typically, it costs around $1 and $5 per day.

Do You Require Rental Car Insurance?

If you have a personal car auto insurance policy, then it will most likely extend to cover your rental car. Also, if your credit card offers you free rental car coverage, then there’s no need to buy rental car insurance from the rental company.

Although the cost of rental car insurance options can seem bearable, they add up to a significant sum over a few days. Thankfully, there’s a high probability you might not need any or all of them since you’re already covered.

If you’re still confused about whether you should buy rental car insurance coverage, check if you already have the following coverage.

  • Regular car insurance policy: Contact your auto insurance provider to know if your policy covers CDW or LDW for rental cars.
  • Health insurance policy: If your health insurance is enough, it can comfortably cover you and any of the passenger's medical bills in case an accident occurs that involves your rental.
  • Travel insurance policy: Some travel insurance policies cover rental collusion, which is like CDW that rental companies offer. And sometimes it’s even cheaper to get such cover via a travel insurance policy.
  • Renters insurance policy: Most renters or homeowner’s insurance policies cover personal property, whether they’re stolen from your home or rental car. This means you can save money by declining the personal property insurance offered by rental companies.
  • Credit card benefits: By charging the rental vehicle to your credit, you can end up enjoying free rental car coverage offered by your card issuer.

When Do You Require Rental Car Insurance?

Here’s are some scenarios that might force you to purchase rental car insurance:

  1. Traveling for a business trip: Even if your car insurance policy covers rental cars, it won’t cover the rental vehicle if you’re renting it for business mainly.
  2. You fear an accident with a rental car will affect your insurance rates: There’s a high possibility that your insurance rates will increase once you file a claim. To prevent such a thing from happening, consider getting rental car insurance.
  3. You’re renting outside the US: Your personal auto insurance policy might provide you with rental vehicle coverage in the US but not abroad. So, you might have to get rental car insurance that works even abroad or get additional protection from your credit card issuer.

Final Thoughts

We hope this guide has answered the question of "should I get rental car insurance coverage." If you want to look for the best rental car insurance, visit our homepage Officialcarinsurance. We're an online car insurance platform, which provides you with pricing information from a wide range of insurance providers to help you compare prices and make the best selection.