Do I need to buy insurance for my rental car?
You spent the good part of day searching for the cheapest rental car for your family vacation, but when you get to the front of the long line at the rental office you are faced with a multitude of questions about insurance. As they explain all the options to you, the line behind you grows longer and longer, and the pressure ensues. You think to yourself “I wish I researched insurance options instead of trying to save a dollar”.
We are giving you a chance to be prepared the next time you are faced with such decisions.
Wait, I already have car insurance, do I really need to buy this too?
As with anything else in insurance, there is no black and white answer, it all depends on your situation. So, the question becomes, how can you be adequately covered without paying for duplicate coverage?
Your first order of business is to call your car insurance agent and ask them about the coverage on your policy and explain that you will be renting a car and would like to know if your current policy covers you for such activities. Ask them if you have physical damage coverage such as comprehensive and collision and whether it would extend to a rental.
More than likely, if you are renting a car similar to your own, your coverage should extend seamlessly. There are a few things you must consider however, such as your deductible amount. You will be responsible to pay your deductible on the spot if involved in a claim with the rental car. Can you afford that?
Using a credit card to rent the car? You should check with the card company to see if they offer any coverage that you would not have to pay for.
Rental Car Coverage Explained:
Here are the options you will most likely be faced with at the renal car counter:
Collision Damage Waiver (CDW)/Loss Damage Waiver – This is not an insurance product, but rather a waiver that transfers financial responsibility from you to the rental car company in case of damage or theft. In most cases, waivers also provide coverage for “loss of use” if the rental car company charges for the time a damaged car can not be used because it is being repaired. In NJ, most auto insurance companies will not cover you for loss of use unless you are renting the car due to an accident or other covered claim.
As previously mentioned, check with your agent and credit card company to make sure you’re already adequately covered, and you may be able to decline this coverage.
Liability Insurance – If you have adequate liability coverage on your own vehicle, this is one coverage you can always decline on your rental.
Personal Effects Coverage – If you have a homeowners, renters or condo policy, your personal items will generally be covered even if they are stolen from a rental car. Review your policy documents to be sure, then decline this coverage.
Personal Accident Insurance – This will cover your medical bills in the event of a crash in the rental car. As long as you have personal injury protection on your auto policy or adequate health insurance, you can decline this coverage.