A question I’m often asked is “do I need to buy the coverage they are pushing at the rental car counter?”.  The answer, as it unfortunately often is with insurance, is “it depends”.

However, I’ll try to boil it down and make it pretty easy for you by sharing a couple of principles.  First is that coverage generally extends from your personal auto policy to “non-owned autos” that you use for less than 30 days consecutively.  Second is that there are two main parts to your auto policy – liability coverage (see our insurance definitions) and coverage for damage to your car.  For liability coverage, if you’re happy with what you’re carrying on your own car, why buy extra coverage from the rental car agent? 

So, that leaves coverage for damage to the rental car itself.  If you’re not carrying coverage for damage to your own car, you need to find alternative coverage.  One way is to buy it from the rental car agent, but this can be costly $10-$15 per day, usually (you don’t pay $3,600 to $5,500 per year for your car insurance, do you?).  Another way is use the FREE coverage that’s probably provided by your credit card.  See Visa’s rental car coverage benefit as an example.  If your card provides this benefit, make sure you pay for the rental using that card.  The main drawback with going this route is this coverage is usually on a reimbursement basis, meaning that you have to float the cost of repairs and/or loss of use for a short period of time until the card issuer reimburses you.  But, hey, it’s free.

If you’re renting a truck or moving van, be sure to check your policy or ask your agent because there are typically size limitations above which your personal policy coverage will not extend to the rental (typically 10,000 or 12,000 lbs. gross vehicle weight).

This entry was posted on Wednesday, July 29th, 2009 at 3:55 pm and is filed under Coverage Questions, Savings Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.