Do You Really Need Rental Car Insurance?


by Brandi Savitt – July 18, 2011

Save Cash by Doing Your Homework

Last week I flew to Los Angeles for some face to face work time with Steph.  I needed to rent a car, and I found an utterly amazing deal through Oribtz for Fox Car Rental ($112 total for 7 days including tax)!  However, just like every time I rent a car, I walked up to the counter, completely confused about what my Amex covered and if I needed to buy any additional coverage.  Like always, the customer service person rattled off ten packages so quickly I thought I was at an auction.  There were so many choices being offered for the economy car that I rented, I panicked and I walked away – having purchased extra coverage just to be safe (which cost almost as much as I spent on the car for the week)!

It can get frustrating when you’re up at that counter trying to figure out what extras you need to buy. The additional coverage always seems like a scam – just another way for them to make more money off of you…  So in an effort to figure it out once and for all, here’s the rental car insurance info you need to know BEFORE you rent your next vehicle so you are properly insured WITHOUT spending more than you have too!

What Do the Basic Coverages Offered Actually Mean?

Collision Insurance

Collision insurance protects drivers in the case of accidents involving other vehicles, objects, people and the surface of the road. Collision insurance covers the driver whether or not he or she is at fault for the accident. It also provides for towing, storage, and salvage if the car has been badly damaged. Collision insurance will cover the cost of repairs to the vehicle (depending on the value of the car) or replacement of the vehicle if badly damaged.  *Keep in mind, coverage is always limited to the terms and conditions contained in the policy.

Rental Liability Coverage

This is primary insurance offered to protect you against claims made by a third party for bodily injury and/or property damage sustained while operating the rental vehicle, up to the required financial responsibility limits of the state in which the vehicle is rented. It typically does not cover all situations that may arise while operating a rental vehicle.  Bodily Injury Liability does NOT cover you or other people on your policy (but collision does). *Coverage is limited to the terms and conditions contained in the policy. It is mandatory in most states.

Other Insurance Commonly Offered

These extra options are not mandatory by law and are typically covered by your credit card or personal insurance.  Do check with your credit card company and insurance provider, but unless you are renting a special vehicle that is not covered by other means, or you are driving somewhere you feel more at risk, these extra policies are rarely worth the expense!

  • Supplemental Rental Insurance
  • Personal Property/Personal Accident Coverage
  • Loss Damage Waiver
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6 Responses to “Do You Really Need Rental Car Insurance?”

  1. Leslie says:

    I loved this article. I have ALWAYS been confused by what to do. Seems
    a little research up front will be well worth it.

  2. carol says:

    This article is VERY informative. Thank you!!

  3. liz says:

    This was a great article and I hope people really read it. My husband and I were on vacation when we were staying with a friend and he decided to allow our friend to drive the car to the bakery about 3 blocks from where we were staying. They made the mistake of leaving the coffee on the dashboard and when the car started the coffee when flying. Both went for it and the car went out of control. Because we did not have our friend on as a second driver we had to pay for the accident in full. $8000.00. We spoke with all the insurance companies and credit cards, but unless we lied about who was driving we would have to pay. We paid for it. I believe in honesty because when you lie it will come back and bite you in the tush. Read all the fine print and become educated in all you liablities.

  4. Thanks for sharing. Share is caring after all.

  5. Leviticus says:

    Great Blog! Good article.

  6. carol says:

    Thanks for the info! I always feel intimidated and pressured to purchase the extra insurance when renting a car. This article was very informative.

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