Home and Auto Insurance in Florida

Rental Car Insurance – Is It Really Necessary?

Should I buy the extra insurance when I rent a car?

Before you are faced with the question of whether or not you should pay for the extra insurance when you are renting a car, here are a few quick notes:

  • If you have Collision and Comprehensive on your Auto Insurance policy, those often extend to rental cars (as long as they are within the US). You’ll still have your deductible, and there can be other fees, but you are rarely left completely abandoned as some may make it sound when faced with the decision to buy or not buy the extra insurance.

  • Even if your Auto policy extends to the rental car, there can be other fees and expenses that arise in the event of an accident. For example, let’s assume you had a fender bender that generated $5000 in damage to the car. In addition to that damage (that would hopefully be covered by your personal Auto Insurance), the rental car company will assess additional fees because they can no longer rent that car until it is fixed, plus any administration and processing fees they charge to coordinate and handle the fixes and losses. These extra fees can often come close (or even exceed) the actual cost of fixing the car.

So, what are your options?

You basically have three main options when renting a car:

  • Use a special credit card that provides specific benefits for rental car situations. Many of the feature-rich cards provide special coverage for these situations, making the rental car offering less necessary
  • If you don’t have one of these credit cards, you can just skip the insurance all together, but just know that you could easily have the extra fees mentioned above if you did have a damaged vehicle while renting it.
  • If you don’t have one of these credit cards and you don’t want to take the risk of extra fees from the rental car company in case of a claim, you might want to purchase the extra coverage offered by the rental car company

There isn’t really a right or wrong answer in this, but the best option is probably going to be have (and use) a benefit-rich credit card with Rental Car benefits to help avoid any issues (without needing to buy extra insurance). Hopefully this helps you feel more comfortable with the coverage situation and options the next time you’re asked the question of whether to buy the extra coverage when renting a car.

Joel Meek

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