There are many factors to consider before purchasing rental car insurance. For starters, you may already be covered by your current car insurance or your credit card; according to Merle Scheiber of the National Association of Insurance Commissioners, “Your personal auto car coverage usually [includes] rental car coverage.”
If your personal auto insurance plan includes collision coverage then, “getting the rental car insurance policy is a waste of money,” according to auto rental consultant Neil Abrams.
Can My Credit Car Provide Free Rental Car Insurance?
A number of major credit card holders, such as Visa, offer rental auto insurance to cardholders. Visa’s auto rental collision-damage waiver reimburses the cardholder for damage due to collision or theft up to the actual cash value of most rental vehicles. However, this coverage only applies to damages or expenses that are not covered by other forms of insurance or reimbursement.
Certain cards only offer this to ‘elite’ members, so consult with your credit card company before making a decision to see if these privileges apply to you.
Why Buy Insurance From the Rental Company?
Buying rental insurance from the rental company protects you from significant expenses associated with damage to the vehicle, including theft. However, rental companies are not insurance providers – what they offer is, in essence, a protection package.
“It doesn’t help where clear negligence is involved,” according to Abrams. “If you leave your car with the engine running and the key in the ignition, and the car disappears, the rental company may have a problem with that.”
If you rent a car, check your auto insurance policy and/or with your credit card provider to see how much you are already covered. Speak with your agent and ask if he or she recommends purchasing additional insurance for the rental. Make sure you are adequately covered in case of an accident.
Did you know? If your personal auto insurance doesn’t cover business use, your policy might not cover damage caused when you rent a car for a business trip.
Koonz, McKenney, Johnson, DePaolis & Lightfoot, L.L.P.