Don’t Pay for Unnecessary Rental Car Insurance While Traveling

Occasionally using public transportation isn’t an option, and that means a rental car.  You shop around for the best rate for your location, arrive at your destination, get to the desk, go over the paperwork, hand over your license, and then you get the question, “Would you like insurance?”

If you don’t travel much, you may be tempted to say yes – whether from feeling pressured into saying yes (feeling irresponsible if you say no) or because you’re thinking it’s only an extra $10 or so a day, what’s the big deal.

It is a big deal, at least for the car rental companies.  Offering the insurance option, and convincing you to take it, provides a very healthy profit margin for the company — AND it’s the rare circumstance where you actually need it.  I don’t mean “need” in terms of having to submit a claim, I mean “need” in the sense that most drivers are already covered.

If you currently own a vehicle that is insured, your policy will cover you if you are driving another vehicle.  That includes a rental car.  Of course, the same policy limits (the amount paid per claim) and deductible apply to the rental as to your own vehicle.  If you have any doubt about your coverage, check with your insurance company and get your questions answered before you need to rent a car.

Another source of insurance may come from your credit card company.  Most credit cards offer the same type of insurance offered by the rental company when the rental is charged to the credit card.  You can stack that coverage on top of your personal coverage, and see that a third coverage (for an additional charge) is unnecessary.

Also, remember that insurance offered by the rental car company is offered to protect the rental car company, and not you.  The company is concerned with making sure that if a car is damaged, someone else will pay for the repairs and lost revenue while the car is out of service.  The coverage is narrow and limited and is not a full coverage policy, so you wind up paying a very high premium for insufficient coverage.

What if you don’t have a vehicle or insurance:

  • Check with a few of the major automobile insurance companies and see if the short term, a full-coverage policy is available.
  • Then check with your credit card company to determine the coverage that it offers.  If you’re a member of AAA, check to see if there is coverage available through your membership.
  • Finally, and as a last resort, your only option may be to take the insurance offered through the rental car company — but make sure you’ve investigated your other options first.e of your own, and want to make sure you are protected while renting a car?

If you are renting a luxury or exotic car (like a Ferrari to drive around Hawaii), it’s a good idea to check your policy to see if there are any exclusions that you should be concerned with.

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