Should I get rental car insurance?

Should I purchase the rental car insurance that is offered? Finding a clear answer to this decision after you’ve spent the day flying and waiting in lines at the airport can be convoluted. Many people are rightfully confused whether the $30-50 per day cost is worth it.1

Let’s not make this complicated and cut right to the chase: If you have a history of being a responsible driver and are in good standing with your insurance company, by declining the added insurance, you could save hundreds of dollars a year if you rent a vehicle frequently. If you forego the added insurance, in the event of an accident, your normal insurance would likely cover the damages per your current insurance policy. However, your rates can go up for the next several years from even a single incident so lets look at some of the reasons why you would consider insurance…

*By purchasing insurance on the rental car, the temporary insurance will act as the primary insurer, alleviating you of having a rate increase on your normal insurance or having to pay our of pocket for an accident. A scratch, a ding, a shopping cart into your rental car? That’s usually not a big deal to big car rental fleets -if you’ve purchased their insurance. If you haven’t, you can expect a claim to be filed by the rental car agency or you may even need to pay out-of-pocket for the damages for something minor.

A few notes & our tips:

  • If you do not carry comprehensive or collision on your current auto policy you WILL NOT have comprehensive or collision on your rental vehicle through your normal provider and therefore you should strongly consider accepting the rental insurance coverage.
  • Many credit cards come with a no-cost rental car collision coverage, but not all cards are alike so make sure you understand the coverage restrictions before refusing coverage at the rental car counter.
  • You may be able to negotiate the daily cost of the rental car by adding their insurance. This has happened to us several times.
  • You may also save money on the rental car by presenting your Triple AAA rewards club card, an AARP card or by inquiring if they have an education discount (usually for teachers, rarely students). The end results of your negotiation could be similar to paying the regular cost of the car rental AND having their insurance for just a few additional dollars.

*Rental car insurance offers four important coverages:

  1. Loss Damage Waiver (LDW)

    Also referred to as collision damage waivers and is not technically an insurance product—it relieves or “waives” renters of financial responsibility if a rental car is damaged or stolen. In most cases, waivers also provide coverage for “loss of use,” in the event the rental car company charges the renter for the time a damaged car cannot be used because it is being repaired. It may also cover towing and administrative fees. Loss damage waivers cost between $10 and $20 a day.2

  2. Liability Protection

    Provides financial protection from lawsuits in the event you are sued following an accident involving a rental car. While by law, rental companies must provide the state required amount of liability insurance, generally, these amounts are low and do not provide much protection. Furthermore, the company has the right to recoup any monies it pays out from the renter. You should probably only forgo the additional liability protection if you have adequate amounts of liability protection on your own car. If you decide you want the supplemental insurance, it will cost between $7 and $14 a day.

  3. Personal Accident Insurance

    Will cover you and your passengers for medical and ambulance bills incurred by injuries in a car crash. If you have adequate health insurance or are covered by personal injury protection under your own car insurance, you may not need this additional insurance. It usually costs about $1 to $5 a day.

  4. Personal Effects Coverage

    Provides insurance protection for the theft of items in your car. If you have a homeowners or renters insurance policy that includes off-premises theft coverage, you are generally covered for theft of your belongings away from home, minus the deductible. Personal effects coverage generally costs between $1 and $4 a day.

Who is Answer Financial?

As one of the nation’s largest and most reputable auto & home insurance agencies, Answer Financial has insured nearly 5 million homes and vehicles. We work with 40+ top-rated carriers to save our customers an average of $565 a year on insurance.*

On our mobile-friendly website, shoppers can quickly compare rates and customize coverages from multiple home insurers. By simply entering your zip code and home address, Answer can search publicly available records like square footage and year built to deliver side-by-side comparison quotes from reputable insurance companies.

Answer Financial can help you compare, buy and often save the smart way on insurance. So before you shop, remember to rely on your insurance experts to find you the right home insurance plan for your needs and budget.

1 Comment

  1. Gio on September 14, 2015 at 3:18 pm

    If you borrow somonee else’s car, their liability insurance should cover you. If you rent a car, you will have to purchase insurance from the rental company when you pay for the car.