Rental car insurance is an option that many consumers are offered when renting a vehicle. But is it worth the extra cost, and do you really need rental car insurance? There are some key factors to consider before making a decision on whether to buy rental car insurance. In this article, we'll look at the potential costs and benefits of getting rental car insurance to help you decide.
Do You Need Rental Car Insurance?
The short answer is yes, most of the time you should get rental car insurance. While it is possible to go without insurance on a rental, the risks associated with not having it can be costly in the long run. In general, you should consider purchasing car insurance if you don't have any coverage through your own auto insurance or a credit card. Additionally, depending on your destination, you may be legally required to have an additional policy.
Consider If You Have Sufficient Protection
It’s important to understand the protection associated with rental vehicles so that you don’t find yourself without adequate coverage while traveling. If you have an auto insurance policy of your own, you may want to look into whether that policy extends the same coverage to a rental car. Some credit cards also offer a certain level of coverage when renting a car, but this could vary greatly depending on the card.
So to learn whether you need additional car insurance, here are some things you can do:
First, check your own car insurance policy to see if it covers rental cars. If it does, then additional insurance may not be necessary. However, if your policy has limited coverage or doesn't cover rental cars at all, then purchasing additional insurance could provide important protection in case of accidents or theft. Another thing to note is the amount of deductible that your existing car insurance policy has, since you could end up shouldering more of the costs than you have to if you had separate rental car insurance coverage.
Secondly, consider whether you have other forms of protection such as credit card benefits that provide rental car coverage. Some credit cards offer collision damage and liability coverage for rentals paid for with their card. Be sure to review the specific terms and limitations of these benefits before you totally forego rental car insurance from other providers. For instance, you should be aware that most credit cards don’t provide primary coverage and usually have very low limits. Also, you should book your rental car with the credit card in order to enjoy the insurance benefits that come with it.
Finally, you should find out what the state minimum liability is, if any, in the state where you’re going to drive your rental car. Then you could compare whatever coverage you may already have with the mandatory liability coverage.
Take the time to review any policies closely before relying on them for protection when renting a vehicle. Knowing in advance what type of coverage is provided and if there are any limits will help ensure you have no surprises should something happen while renting a car.
Your rental car insurance options
Once you have a good idea of the gaps in your rental car insurance coverage, you can start exploring the possible options that will cover your needs.
Getting adequate coverage is very important if you don’t have a personal car insurance policy or any form of primary coverage. In this case, your priority should be to get adequate coverage before you even book your rental car - or while doing so. If you’re planning to drive an economy car, for instance, you need to have at least $15,000 in case something happens that totals your rental vehicle.
Also called primary damage cover, this is insurance for accidents between vehicles. Damage insurance pays for the cost of damages to your rented vehicle in the event that it is involved in an accident or otherwise damaged while in your possession. Without this coverage, you could be responsible for paying out-of-pocket for any repairs or replacement costs associated with the rental car. [Tip: Bonzah’s damage coverage is up to $35,000 and serves as primary accidental damage cover]
Likewise, you should make sure you have renter’s contingent liability insurance or primary liability coverage in case your rental car does not provide it (some states make this mandatory, but you have to check if this is the case with your destination). The state minimum liability is usually at $50,000 so you should aim for coverage with at least this amount.
Aside from damage and liability coverage, you also have the option of getting additional policies so you’re fully protected. If you don’t have existing life insurance, for instance, you might want to avail of Personal Accident Insurance (PAI), which covers medical bills, lost income, and other expenses that may arise as a result of an accident. PAI can also include personal effects protection that covers items stolen from your rental car during the period that you are renting it.
Another option offered by some rental companies is roadside assistance coverage, which includes help with jumpstarts and tows if you get stranded on the side of the road.
Understanding what types of coverage are available can provide important peace of mind as well as make sure that you have all of your bases covered when renting a car.
Costs associated with each type of coverage
Now that you have a better idea of the different coverage types, you can start assessing how much you’re likely to spend on your insurance needs. Rental car insurance costs often vary depending on the extent of coverage, your location, and the provider.
While a basic rental car insurance policy may cost just a few dollars a day, a more comprehensive coverage like your personal car insurance usually costs anywhere from hundreds to thousands annually. And if you’re not a car owner, your only option is to get standalone rental car insurance.
Similarly, insurance costs often vary from location to location. According to Experian, for instance, car insurance policies are more expensive in New York and Delaware. So you can expect to get a higher quote if you’re driving in these states than if you were driving elsewhere.
With whom you’re getting insurance from is also a big factor. Some providers charge higher than others, as is the case when you’re getting coverage from the rental car company. The key is to do your research and compare your options so you can pick the most affordable coverage that still provides you with a level of protection that is suitable for your individual needs and financial situation.
Interested in learning more? Read our post on how much does rental car insurance cost
Assess the potential financial risks of going without rental car insurance
People often choose to forgo rental car insurance because they see it as an unnecessary expense. However, financial risks are considerable if you opt out of rental car insurance.
From rental car damage and liability to coverage for anything else that may happen, such as theft or vandalism, the risks of going without proper insurance far outweigh any resulting cost savings. If you're involved in an accident while driving the rental vehicle and don't have insurance coverage, you'll be responsible for all damage done to both the rental car and any other vehicles involved. You could also be liable for medical costs associated with the accident. Furthermore, it costs more, in the long run, to go without insurance than pay to have it covered. That’s because you won't have any sort of buffer when facing these potential costs.
You never know when an accident will occur and it’s not worth the risk of driving uninsured. The good news is that there are a wide variety of rental car insurance options available, from the rental company itself to your own auto insurance provider or third-party insurers. So before making your final decision on whether or not you need to buy insurance coverage when renting a car, make sure you carefully assess all the potential financial risks of going without it.
Is Rental Car Insurance Worth the Expense?
Although it can be tempting to skip out on the extra insurance, it's important to remember that if you do and you get involved in an accident, the cost of your own medical bills and vehicle repairs could end up costing significantly more than what you saved by not purchasing rental car insurance. Before making a decision, think hard about the potential risks in your rental scenario and determine if paying for protection is worth it.
If you’re looking for affordable rental car damage and liability coverage, make sure to check out Bonzah’s rental car insurance options!