Let’s say your own vehicle has been damaged and you have no choice but to rent a vehicle. Or better yet, you are going on vacation and do not want to put all those miles on your own vehicle. You have found a rental car that will work for you, but what do you say to the employee at the car rental counter when he or she asks you if you want rental insurance coverage?
First, you need to know what coverages are being offered. Typically, there are four separate types of coverage:
Collision Damage – Covers a stolen or damaged rental car, towing charges, and the loss-of-use of the rental vehicle while it is being repaired.
Liability – protects you from having to pay out-of-pocket if you are at fault in an automobile accident.
Medical Benefits – if you are involved in an accident, it will pay for medical bills up to a certain limit.
Personal Belongings – pays for personal items in the rental car that may be damaged in an accident.
Second, you need to know if your own automobile insurance policy has comprehensive and collision coverage and is sufficient to eliminate the need for collision damage coverage. Keep in mind, this coverage will only apply if you are using the rental vehicle for personal use. Check with your insurance agent and make sure that loss of use and any other incidental items that may be charged by the rental car agency are covered by your own insurance policy. If they are not, getting the collision damage coverage may be well worth the peace of mind knowing that no matter what damages might arise, you are covered. However, keep in mind, that if you use a major credit to pay for the rental vehicle, some form of coverage is automatically offered by the credit card company (except some MasterCard cards) and that coverage will be nullified when you sign up for the rental car insurance coverage. So check with your credit card company to familiarize yourself with the coverage they offer before making a decision.
Your own automobile insurance policy provides liability coverage and medical benefits, if you opted for the later. If you have homeowner’s insurance, it will cover the personal belongings in the rental car.
Rental car insurance coverage is a good idea if you do not have personal automobile and homeowner’s insurance, or your own automobile insurance does not have comprehensive and collision coverages.
Make sure you know what coverage you already may have before wasting money on extra and unnecessary coverage.