Rental Car Insurance: Know Before You Go

Not sure if you need that insurance the rental car company offers you? The rental car companies will try to make as much money off of you as possible (through insurance policies and various “administrative” and “convenience” fees). Beware. Chances are you’re already covered and purchasing that damage or accident waiver will be a huge waste of money.

Personal Auto Insurance Policy

If you own a car and have an auto insurance policy, you’re likely already covered on a rental vehicle. Do your homework. You need to know what and how much your insurance policy covers. Call your insurance company and make sure you are covered for damage/theft/loss of use/personal injury while using the rental car.

It may turn out that you have adequate coverage and don’t need to purchase any extra insurance. If not, you should consider increasing your insurance coverage to cover rental vehicles. By doing so, you may still save money compared to the policy offered by the rental company in the event of an accident. To make an informed decision, you must know what your personal auto insurance policy covers with respect to liability when driving a rental car.

Credit Card Coverage?

Some credit cards offer rental car insurance policies. If you have a credit card, check with your card’s service department to see if they offer such coverage. Coverage by credit card companies tends to be more limited than a standard auto insurance policy. For example, most credit card rental insurance policies do not cover personal injury. Some only offer damage waivers. You may also be limited to renting certain types of vehicles and will have to use the card to pay for the rental car. If you’re relying on a credit card policy, you might need to supplement the coverage.

Other ways to save:

Read the rental agreement. You’ll likely find that it requires you to return the car with a full tank of gas. The rental agent may offer to fill up the tank for you upon your return, for a discounted gas price, but they usually charge you a hefty convenience fee for this service. You’re likely better off filling up the tank on your own.

Opt out of add-ons. If you have a smart phone, there is no need to pay for GPS in a rental car because you can access GPS on your own.

Finally, return your car to the same location you picked it up. It can cost hundreds to return to a different location. Renting from an airport location is typically more expensive. If you can, try renting from other locations.

Before you rent a car, do some research. Know the source and scope of insurance you do (or do not) have. Know exactly what terms you are agreeing to. Be wary of additional services that are advertised as convenient or complimentary. You could end up saving hundreds of dollars on your rental car.