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Do You Need Rental Car Insurance?

rental_carsAs we all know, driving can be dangerous, so you may want to consider the need to purchase car insurance for rental cars. It may not always be necessary to buy extra coverage when you already have an auto insurance policy that is all-inclusive, but it does warrant some investigation.

A thought to consider is whether or not your credit card company offers any collision protection. When renting a car, paying with a credit card may come with the added benefit of doubling as a form of rental car insurance. However, the coverage offered may not be much, or may be considered secondary, which risks the possibility of out of pocket expenses. Also, the amount of coverage depends on the bank or credit company that issued the card. There are also advantages to traveling for work purposes. Drivers are usually guaranteed full coverage when on company business, but must verify with their workplace in advance.

Thinking about getting your coverage directly from the rental car company? You’ve got some more investigating to do. Insurance coverages from rental car companies are all over the place and generally can be fraught with all kinds of stipulations and exclusions and certainly not all rental car companies are not on equal ground.

At the rental car counter, you will be offered several different types of coverages which will add money on to your base rental rate. What many people may not realize is that most of these are often already covered by your personal auto insurance policy. The best thing to do is to check with your insurance agent or carrier before you rent a car and find out exactly what is covered under your existing policy. This should help you avoid shelling out extra money for things that are already covered.

Many of the coverages offered at the rental car counter are often already covered by your personal auto insurance policy. One exception to this is what is called Collision Damage Waiver, or CDW. This extra daily charge covers both the cost of damages to the rental car if you are involved in an accident and the “loss of use” that the rental company will charge you. “Loss of use” means the time and money the rental car company lost since the vehicle could not be rented. While the damage to the vehicle itself may be covered by your personal auto insurance policy, the “loss of use” very likely will not be.

When it comes to traveling and more specifically rental car insurance, the market is extremely competitive for your dollar. This is because not only do the insurance companies compete for your dollar, but so too do the rental car agencies, and your credit card companies as well. And while all this competition may sound as though it works to your advantage as a consumer, all the marketing hype may change if you have an accident.

Start by contacting your insurance agent and see if your policy includes rental car insurance. Most auto insurance policies do including covering you in a rental car as well. Of course, verify this with your agent. Make sure it includes collision and liability insurance (damage to your car and to the other vehicle). Make sure your current coverage doesn’t fall short of the type of car you may be planning on renting. For instance, if you drive an older car with minimal coverage, you may be putting yourself at risk if you?re going to rent a top level newer car. So, check on any limitations that your policy may have. Find out what the conditionals are ahead of time so you don?t get caught short.

Most people like to skip out on rental car insurance to save a buck or two. Before you turn it down, make sure you have a backup – otherwise an accident can cost you thousands of dollars.

Start with your car insurance policy. If you have comprehensive or collision coverage, your policy may extend to rental cars as well. Most insurance companies will also provide liability insurance if you injure somebody in an accident. If you’re covered, you don’t need to pay the extra money.