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The Curious Case of Rental Car Insurance


At some point, almost all of us are going to have to rent a car. Inevitably, when we do, we will be asked about purchasing rental car insurance or not. What do you say? Well, if you are like most people, you have been put on the spot and aren’t quite sure what to do. They certainly make it sound like you have to purchase their insurance or you may be on a quick road to issues. That isn’t necessarily the case, though. There are times when it is beneficial to purchase the rental company’s insurance, but there is also a good chance you will be covered already.

The salespeople are going to tell you at the counter (usually for legal reasons) about what the potential consequences could be if you leave with your rental car without buying additional insurance. What they do not tell you, however, is that many credit cards will come with complimentary rental car insurance if you utilize them as a payment method. They also don’t tell you that your own auto insurance can be applied to rental cars in many cases as well.

Let’s cover a few situations and see what the best option is:

· For car theft and most crashes, the rental company will often have you sign a loss damage waiver or a collision damage waiver to alleviate your burden for any damage to the vehicle or in the event it is stolen. Collision and comprehensive coverages on your personal policy usually extend to these situations.

· For damage done to other vehicles or property, your personal policy will usually extend to this as well. Supplemental liability is available from the rental car company should you want it, though (or in the event you don’t have your own auto insurance).

· Personal injuries are often covered by your own health insurance, but the rental car companies offer policies covering these situations as well.

The bottom line is the person who decides whether or not you need rental car insurance should be you and not a rental car company employee (who is probably getting a commission and kickback from the insurance company to sell you the coverage). Look at your current insurance, what payment options you have, and what you are using the vehicle for, and then make an informed decision. Another consideration is the fact that you can buy rental car insurance from companies outside of the rental car companies themselves. The options are almost limitless, depending on what you want or need.

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