Do I Need Rental Car Insurance?

Is your vacation is going to include a rental car? Your insurance agent — not your travel agent — should be the first call on your list.

That’s because insurance carriers, credit card companies, and car rental agencies are competing for your insurance dollars — and more importantly, what they offer you today might be different from what they’ll be offering you next week.

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It’s up to you to make sure you’re covered when you rent a car. So plan ahead. If you have auto insurance, call your agent and find out what kind of coverage you have. Most auto policies extend to rental cars.

Find Out If Your Rental Car Is Covered.

Before you decide what you need:

Check your existing auto insurance policy. Review your auto insurance policy or call your insurance agent before you rent a car. You don’t want to pay extra money at the rental counter for coverage you already have.

Most auto insurance policies will provide liability insurance if you injure someone in an accident. However, damages to the rental car are only covered under your policy’s comprehensive and collision coverage. Make sure your auto policy includes this type of coverage.

Ask specifically about two things: collision damage waiver and liability. Collision damage waiver, or CDW, covers any damage to the car you are driving. Liability covers damage you do to someone else.

Check your credit cards. In some cases, your credit card will pay for damages to a rental car in the event of an accident. To be eligible, you probably would have to decline the collision damage waiver from the rental company as well as charge the full amount of the rental car on your card.

Also make sure you understand all limitations and exclusions your credit card may issue, such as limited rental contracts and approved rental dealers. You can safely decline the rental car company’s collision damage waiver if you’re absolutely sure your auto insurance or credit card has got you covered.

If you’re current auto insurance policy doesn’t offer you rental car coverage, it might be time to switch to a policy that does. You can use our free service to start comparing your options. Fill out an easy online form, and you’ll be contacted with free auto insurance quotes.