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Do You Need Extra Coverage for a Rental Car?
When you rent a car, the agency usually asks if you want to buy supplemental coverage. It is important to note that all your existing insurance – including auto, homeowners, liability, medical and life insurance – generally apply when you are driving a rental car. So assuming that you have appropriate coverage limits, you probably don’t need to buy additional liability or medical coverage.
Coverage for physical damage to the car is less clear-cut. Although the collision coverage on your existing car insurance probably applies to a rental vehicle, there are other factors that you might want to consider, including:
In general, we recommend that you consider several factors when deciding whether to buy additional coverage. For example:
- The rental agency offers first-dollar protection, so you would not be on the hook for the amount of the deductible on your personal policy. If you go with your personal insurance, you have to pay that deductible.
- If you have an accident, it will not show up as a claim against your insurance and therefore will not have a negative impact on your rates.
- It can ease a lot of hassles. If, for example, you return your car with damage and you do not have supplemental coverage, the rental agency probably will not let you leave until it has been assured by the insurer for the party responsible for the accident that the damage will be covered – even if that means you miss your flight. However, if you have the supplemental coverage, you usually can leave without delay because the agency is responsible for payment.
- There are some situations in which your personal insurance might not apply. For example, if your personal insurance does not cover business use, you might not have coverage if you rent a car on a business trip.
- Your personal insurance might not apply in certain places. The most common for U.S. drivers is Mexico; virtually all coverage is not in effect if you are driving in Mexico, so you need special insurance to travel south of the border.
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- Where are you driving? Are you are driving somewhere that is unfamiliar to you? Might you be driving in bad weather? These and similar factors could increase the chances that you could have an accident.
- What does the coverage cost? If your rental is short-term and the cost is not prohibitive, it might make sense. But if it would add significantly to the cost of your rental, you might want to decline.
- Is there any other potential coverage? For example, many credit cards provide some form of insurance when you use the card to rent a car. Check to see what is available through your card.