Rental Car Insurance

Is rental car insurance really worth the money?

You may already be covered, so do your homework

You’re at the rental car counter, almost done with the paperwork and ready to finally get the keys to take off when you get to the section about insurance. D’oh! You see the long list of options and how each one will protect you if you get in an accident, meanwhile the representative informs you about how important it is to be covered. Not knowing what your own insurance policy covers, you pick a mid-level policy from the list only to find out later that you just wasted $100 on insurance for a car you were already covered for under your existing policy! This situation is more common than you’d think and can easily be avoided by doing just a little bit of homework before you go in to pick up the car.

A 2007 NAIC (National Association of Auto Insurance Commisioners) survey reported that 42% of drivers say they were “either thoroughly confused or had only a rough idea about insurance.” In addition, they found that 34% of car renters bought the rental car company’s insurance “just to make sure they were covered.” So do you really need it?

There are three primary ways to be covered when you rent a car. We’ll outline these three options and help you make an informed decision on whether or not rental car insurance is worth it for you.

1. Your Insurance Carrier The first thing you should check when looking into rental car insurance is whether or not your current car insurance policy covers rental cars as well. Most policies do and using your existing policy is generally the best option for rental car insurance. So your first step is to call your insurance agent and find out what your coverage is from them.

2. Credit Card Secondly, many credit card companies cover rental cars as well. They often cover collision and even theft protection and can be used in addition to a personal insurance policy to provide sufficient coverage for the rental car.

3. Rental Company’s Insurance If the others fail to cover you, or you’d rather have peace of mind over saving some money, choose the rental car insurance from the company. Though it is not the most cost effective method, it is sometimes the simplest and will afford you the most peace of mind. In addition, some rental car companies are adding fees to damages you owe if you get in an accident with the car. These additional fees may not be covered under your existing policy or your credit card.

So what is our recommendation? First find out what you are already covered for from your insurance provider and your credit card company. Second, when you’re at the rental car company, find out exactly what their terms are so that you can make an intelligent decision without wasting your hard-earned money. Rental car insurance can be a difficult topic but armed with these tips, you should be able to make a good decision and enjoy your vacation, knowing you are covered no matter what happens.

Sources: http://www.usatoday.com/money/perfi/insurance/2007-12-10-car-rental-insurance_N.htm http://www.creditcards.com/credit-card-news/rental-car-credit-card-protections-vary-1273.php