Renting a car isn't the problem, if you have insurance covering a car that you own, often the coverage on that car will extend to other cars you might be driving including a short term rental car. The problem isn't the rental car, it's the rental agreement you sign and most often fail to read.
These agreements often will say you understand the insurance the rental company carries on the car will not apply to you or in some cases it applies only up to the state minimum. So if you don't have your own coverage, there won't be any if you have an accident.
Many of these agreements require you to be responsible for any damage to the car even if it is not your fault. Knowingly or unknowingly, you assume a responsibility you normally do not have.
If the rental car is damaged, the agreements usually say you agree to pay not only for the repair or replacement of the car but also the loss of rental revenue the company loses while the car is being repaired and any administrative costs the rental company incurs as a result of that damage.
You also commonly agree to reimburse the rental company for any legal expenses or judgements they are required to pay. You assume all the risks, they assume none.
Some of these assumptions may covered by the insurance you might have on your own car but many may not and that is where the problem lies. They have your credit card and you give them permission to add these charges to your card.
It may not be necessary to purchase insurance when you rent a car, but be aware of what you are agreeing to. Make sure you accept those potential risks, are covered for them by your own auto insurance or personal umbrella, are willing to pay those hefty waiver charges or simply don't rent the car.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
It is always a good idea to check with your Insurance Professional when you are planning to rent a car. In many cases, the coverage that you have on your car(s) as provided by your Insurance Carrier, may extend over to a rental. It is important to consider, however, that this extension ov coverage may only apply to private passenger cars. In other words, if you are planning on renting a UHaul, for example, it may be neccesary in that situation for you to purchase the short term coverage that may be offered with the rental agreement.
Sales Representative, Liberty Mutual, Sterling Heights, MI
My previous career was for a rental company so I have a great deal of knowledge in this area. When determining purchasing insurance when renting a car it is important to consider these main factors.
1) Quality of your own insurance policy – If you have state minimum coverage don’t except much help from your insurance company if something were to happen.
2) Purpose of Rental- Yes, The reason why you are renting the car plays a big factor. Some insurance policies will only cover rental vehicles if it is a replacement rental. So if you are renting for a family vacation there is a possibility that you aren’t covered. Always check with your insurance company.
3) Type of Vehicle – Another huge factor, a lot of policies won’t cover any vehicles that are built on a pick up truck frame. Most consumers are unaware that some minivans and SUV’s are in fact built upon a pickup truck frames. The best way to protect yourself against this is to always rent a vehicle that similar to the car on your policy (If you have a SUV on your policy, you should be safe to drive a SUV)
4) Does your credit card cover it? A little known benefit (that most credit cards have) is rental coverage! Some will require you to activate it before renting a vehicle while others will give it you automatically. I would always check with your credit card provider to see which type of coverage you have. They often pay for loss-of-use as well which is an extra bonus that most insurance policies won’t cover.
5) The Length of the rental- The longer the rental the more expensive the rental insurance becomes. At some point the amount of money you are paying for the extra insurance isn’t going to be worth it. That breaking point is up to you to decide.
6) If something were to happen right now, what can you afford? I think this is the most important. The most common rental is a 3 day weekend rental. The typical insurance cost for that that length of time can be $60 to $200. However, the cost of damage, loss of use, and deductibles can add up to be $2,000 and get as high as the total loss value of the vehicle. If you were to total out a vehicle would your insurance cover it? Or could you afford a $20,000 vehicle that you won’t drive?
7) Remember it is not your vehicle! Very often damage happens to our own vehicle and we don’t even notice or care because we consider the damage to be minimal. However this is not the case when renting a vehicle. You do not have control over what damages are fixed and which ones aren’t. So Keep in mind that a ding to you, could be consider major damage to them.
At the end of the day, you have to be honest with yourself and determine if purchasing the extra insurance is worth it or not. Not every situation is a same and multiple factors needs to be taken into account.
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These agreements often will say you understand the insurance the rental company carries on the car will not apply to you or in some cases it applies only up to the state minimum. So if you don't have your own coverage, there won't be any if you have an accident.
Many of these agreements require you to be responsible for any damage to the car even if it is not your fault. Knowingly or unknowingly, you assume a responsibility you normally do not have.
If the rental car is damaged, the agreements usually say you agree to pay not only for the repair or replacement of the car but also the loss of rental revenue the company loses while the car is being repaired and any administrative costs the rental company incurs as a result of that damage.
You also commonly agree to reimburse the rental company for any legal expenses or judgements they are required to pay. You assume all the risks, they assume none.
Some of these assumptions may covered by the insurance you might have on your own car but many may not and that is where the problem lies. They have your credit card and you give them permission to add these charges to your card.
It may not be necessary to purchase insurance when you rent a car, but be aware of what you are agreeing to. Make sure you accept those potential risks, are covered for them by your own auto insurance or personal umbrella, are willing to pay those hefty waiver charges or simply don't rent the car.
1) Quality of your own insurance policy – If you have state minimum coverage don’t except much help from your insurance company if something were to happen.
2) Purpose of Rental- Yes, The reason why you are renting the car plays a big factor. Some insurance policies will only cover rental vehicles if it is a replacement rental. So if you are renting for a family vacation there is a possibility that you aren’t covered. Always check with your insurance company.
3) Type of Vehicle – Another huge factor, a lot of policies won’t cover any vehicles that are built on a pick up truck frame. Most consumers are unaware that some minivans and SUV’s are in fact built upon a pickup truck frames. The best way to protect yourself against this is to always rent a vehicle that similar to the car on your policy (If you have a SUV on your policy, you should be safe to drive a SUV)
4) Does your credit card cover it? A little known benefit (that most credit cards have) is rental coverage! Some will require you to activate it before renting a vehicle while others will give it you automatically. I would always check with your credit card provider to see which type of coverage you have. They often pay for loss-of-use as well which is an extra bonus that most insurance policies won’t cover.
5) The Length of the rental- The longer the rental the more expensive the rental insurance becomes. At some point the amount of money you are paying for the extra insurance isn’t going to be worth it. That breaking point is up to you to decide.
6) If something were to happen right now, what can you afford? I think this is the most important. The most common rental is a 3 day weekend rental. The typical insurance cost for that that length of time can be $60 to $200. However, the cost of damage, loss of use, and deductibles can add up to be $2,000 and get as high as the total loss value of the vehicle. If you were to total out a vehicle would your insurance cover it? Or could you afford a $20,000 vehicle that you won’t drive?
7) Remember it is not your vehicle! Very often damage happens to our own vehicle and we don’t even notice or care because we consider the damage to be minimal. However this is not the case when renting a vehicle. You do not have control over what damages are fixed and which ones aren’t. So Keep in mind that a ding to you, could be consider major damage to them.
At the end of the day, you have to be honest with yourself and determine if purchasing the extra insurance is worth it or not. Not every situation is a same and multiple factors needs to be taken into account.