Car-rental companies just love to sell you insurance—even though most customers are already protected by their personal policies and/or credit card companies.
Still, there are exceptions. Here’s how to ensure that you’re fully protected without being taken for a ride…
Plan ahead. Never show up at the rental counter unsure of what your existing insurance covers. Review all your policies ahead of time. Also…
Bring your personal auto policy information with you—rental companies often ask to see it.
Check your trip insurance—see what rental-related damages it covers.
Check your credit card—what, if anything, does it cover?
Even your homeowner’s and health insurance might come into play (see below).
Mind the gaps. There’s no universal advice for what insurance to purchase or decline, since most people’s coverage will consist of a patchwork of overlapping policies—auto, credit card, trip insurance, etc. Compare the following list of things that could go wrong against the coverage you already have, and purchase extra insurance to fill the gaps…
Damage to (or theft of) the vehicle. For personal rentals in the US, your own auto policy is sufficient, provided that you have comprehensive collision coverage (your normal deductibles will apply). For other countries, check with your insurer before your trip to see if it will cover damage. If it’s a business rental, ask your employer what coverage it provides. Many credit card companies also insure rentals but get the details. The same goes for any travel insurance policy you have purchased.
If there’s a gap: Buy coverage from a third party such as Allianz, Sure or RentalCover.com. That will be cheaper than buying it at the rental desk. And if you do opt for damage protection via the rental counter, ask for a loss damage waiver—it’s not really insurance but rather an agreement that you won’t have to pay for any damage.
Beware: Many people get scammed when the rental place confronts them with a phony claim of damage (usually in an amount suspiciously close to the deductible). Protect yourself by photographing the entire vehicle and noting any existing damage before you take it off the lot.
Damage to other vehicles. If this isn’t covered by your existing policies, a third party is probably the way to go. Otherwise, buy coverage at the counter. Most car-rental companies have a three-tier offering, with the cheapest product covering damage to the rental…the intermediate covering damage to the rental and other vehicles…and a comprehensive product that includes injury protection. These comprehensive policies can cost $30 to $50 per day—that’s sometimes more than the rental itself.
Medical injuries. Does your personal auto policy have sufficient injury coverage? Is it in effect where you’re going? Will your health insurance work wherever you are? Did you purchase a travel policy that will cover injuries?
Theft of items from the vehicle. Most people are not aware that their homeowner’s or renter’s insurance may cover theft even if you are in another country. Some travel policies will, too. But the best advice is to never leave valuables in your car.