The Eternal Question: Do You Need Rental Car Insurance?

We’ve all been there. You got to Southwest Florida International Airport (RSW) extra early to avoid the lines. The dude to your left snored, literally, the entire flight (admit it, for just a second, you thought about not waking him up after the plane finally reached the destination terminal) and that poor, poor baby behind you was crying because of the air pressure. You’ve just gotten off the plane, picked up your baggage and gone to the rental car counter. You’re pooped from the flight and about to begin an ambitious vacation or a challenging business project. This is the point at which you’re asked the question every weary traveler dreads: “Do you want insurance with that?”

Most people, facing that question from the rental representative, have the vague notion that they don’t really need to buy rental car insurance – which somehow is covered already. With just enough doubt in their minds, and the need to make a quick decision, perhaps they buy it just to be safe.

So, which is it?

Do you need to buy rental car insurance or not?

I hate to say it, but there truly isn’t a one-size-fits-all answer. The great news, however, is that you can likely reach a conclusion you’re comfortable with by considering these three important questions.

1. What Types of Rental Car Insurance Are Available?

Typically, car rental agencies will offer you four types of insurance to purchase:

  • Collision damage waiver – The rental car company won’t charge you for a damaged or stolen vehicle when you buy this.
  • Supplemental liability protection – Electing this will ensure you’re covered for costs to others if you cause an accident in the rental.
  • Personal accident insurance – This coverage will pay for injuries or death of the driver and passengers of your rental car.
  • Personal effects coverage – Reimburses you for stolen personal items while renting the car.

2. What Rental Car Coverage Might I Already Have?

Start with your personal auto insurance. It’s likely that your policy will provide the same level of coverage for your rental as it does for your own car. That usually includes liability insurance, and, depending on the policy you purchased, may include collision, comprehensive and medical payments, too. There are exclusions, however. Some insurers won’t cover rentals in a foreign country, or rentals that are being used for business. Get in touch with your independent insurance agent to verify your coverages.

Next, there’s your credit card. Most cards offer some degree of coverage, but it varies widely. Coverage is usually secondary, designed to step in and pick up where your auto insurance leaves off, and it tends to be mostly confined to collision, damage and theft. For coverage to apply, most cards require that you decline the rental company’s collision damage waiver and pay for the car in full with the card that provides the protection. Again, contact your card company to find out exactly what is covered.

Then, consider your health and life insurance. If you’re in an accident involving a rental car and you have these policies, you likely have coverage for your own costs. Plus, with your homeowners insurance, you may have personal property coverage to help repair or replace valuable belongings that are lost, damaged or stolen while you’re in a rental. It’s crazy but true that your house insurance in Fort Myers could extend coverage to your stolen golf clubs in the British Virgin Islands. Your deductible and policy limits will apply, and the same goes for renters insurance or condo insurance. Please keep that deductible in mind because certain Florida policies have large deductibles that would essentially negate coverage to your personal items because the dollar amount would be so high. Yet another thing to discuss with your agent…

3. What Rental Coverage Might I Be Missing?

In the event something does happen to the rental car, you may be looking at loss of use and diminished value fees, and your regular policy may not cover them. Loss of use is the income that the rental agency loses due to the vehicle being in the shop for repairs, and diminished value is the calculated reduction in a vehicle’s resale value as the result of an accident. Credit cards sometimes cover these, but be aware that they may require documentation that rental agencies can be reluctant to provide.

So, before you make that next trip, give Goodlad & Swank a call and be sure to check with your credit card company. That way you’ll be ready to make an informed decision when you get to the rental car counter. Maybe you’ll even be the lucky one that gets to sleep on the trip back home!