Weighing Your Options: Is Car Rental Insurance Necessary?

Most “authorities” on all things related to car insurance will tell you that car rental insurance isn’t really necessary. It’s worth taking a minute to consider the pros and cons of car rental insurance, however, before being so quick to dismiss it as a waste of money. Car rental insurance is the insurance that car rental companies sometimes “insist” that you purchase before being allowed to rent a car. Here are some points to consider before deciding whether or not to purchase car rental insurance:

What Coverage Do You Already Have?

If your auto insurance policy includes collision and comprehensive coverage, this usually extends to rental vehicles. The same terms apply as if you were driving your own vehicle. Many auto insurance polices do not cover “loss of use.” This is an additional claim a car rental company applies for not being able to make any money from the vehicle while it is being repaired or replaced. Your insurance company may cover damages, but you could be stuck paying for any “loss of use” charges.

2010 Toyota Matrix

Where Do You Plan to Drive?

Check the limits of your auto insurance policy. If you plan to drive out of the country, your auto insurance policy may not cover your vehicle or it may specifically exclude rental vehicles from being covered outside of the country. If you’re traveling overseas and plan to rent a car, you’ll probably need car rental insurance – unless you have a policy that clearly extends your coverage.

What Are the Implications If You Have an Accidents?

Let’s assume you have auto insurance with collision and comprehensive coverage. You get into an accident that’s not too serious, but there is significant damage to your rental car. Your insurance may cover your expenses, but there could still be a price to pay. You may be labeled a “high risk driver” according to the definitions for such a designation set by your insurance provider. These provisions may not make a distinction between your own car and a rental car. As a high risk driver, you’ll pay higher premiums for an extended period of time. It could take you at least a year to get your premiums back to normal.

Can You Afford to Replace Stolen Valuables?

When you travel, you usually pick up souvenirs and other odds and ends. These often end up inside your car and may be stolen if someone breaks into your car while you’re off sightseeing. Even items that you’re traveling with such as iPads, cameras, laptops, or iPods can be stolen if you leave them unattended in your rental vehicle. If you have homeowners or renters insurance, you may be covered for the replacement cost of your personal items. However, this protection only kicks in once you reach a set amount. If you’ve increased your deductible to save money on your insurance, your items may not be covered if they’re under your deductible amount.

Don’t be so quick to dismiss car rental insurance. Under certain circumstances, car rental insurance can cover expenses your auto insurance does not cover and may offer additional protection for your valuables. Before planning a trip, take time to verify what is and isn’t covered by the insurance you already have. Paying a few extra bucks for your car rental may be worth some added peace of mind.

About the Author: Jean Gregory is a blogger who writes for AskForInsurance.com – an insurance questions and answers website where you can learn about topics such asHow does car insurance work in an accident?

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