Rental Car Insurance – How to Decide If You Need It

Posted in Auto Insurance

You’re standing at the car rental counter with bags in hand, when the agent asks a simple question, “Would you like to add rental car insurance today?” What do you say? Do you need it?

Most people make this decision based on the likelihood that they’ll be involved in an accident while driving a rental. Since you probably can’t predict the future, here are some fact-based considerations to help you make an informed decision the next time you have to decide on rental insurance.

Check Your Current Colorado Policy for Rental Car Insurance

Before renting a vehicle, take a few minutes to review your own policy. Depending on the specific coverage you have, you may already have protection. However, make sure, if your current insurance does include coverage for a rental, that it has the type of protection you need. Here is a summary of the coverage available on most auto policies.

  1. Liability: Helps pay for another person’s medical bills and damage to another vehicle from an accident you cause.
  2. Comprehensive: Helps pay for damage to your car caused by theft or natural disaster (fire and wind).
  3. Collision: Helps pay for damage to your car as a result of a collision with another vehicle or stationary object (like a fence). 

Check your policy. If you do carry rental car insurance, consider the following:

  1. Do you have enough liability? You may need to purchase extra liability for a rental if your own policy doesn’t have a sufficient amount.
  2. If you do not have collision or comprehensive on your current insurance, and you damage a rental car, you will have to pay out-of-pocket for repairs.
  3. If you don’t have health insurance, you may want to look into Personal Accident Coverage offered through the rental car agency to help pay for your medical bills in the event you are injured while driving the rental.
  4. Coverage offered through your personal credit card may not apply if you are renting for work.

Protections Provided by Your Credit Cards 

Most people don’t know that when you use a credit card to pay for a rental car, sometimes insurance is provided through the credit company. The easiest way to find out if you card includes coverage is to call the toll free number on the back of your card.

However, be sure to get the details before you pass on coverage at the counter—sometimes the coverage offered through your credit insurer isn’t primary, but secondary. That means they will only pay after rental car insurance pays, not before.

Insuring Personal Property in Colorado

If you plan to keep expensive property in the rental car, like a laptop computer, clothing or jewelry, you may want to consider protection in the event these items are stolen. Most car rental agencies offer Personal Effects Coverage. However, in many cases, your homeowner’s or renters insurance policy has an “off premises coverage”. It’s a good idea to look over these policies to see what type of coverage you already have before adding or passing on personal effects coverage through the car rental agent.

We’re Here to Help 

If you’re unsure how to navigate the options with rental car insurance, or would like to review your own policies to see what kind of coverage you have, please give us a call—we’re happy to help. We can help you sort out your coverage to determine if you may need supplemental coverage to protect yourself.

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