The Low Down On Insurance Coverage for Car Rentals

Tips For Travelers

By Elvis Donnelly

 I love travel! It’s so liberating, and exploring new places is so very exciting. Travel can be an expensive hobby though, so I always look for ways to make it cheaper. This includes everything from buying air tickets as early as possible so that it’s cheap, or even forgoing air travel when possible. I also backpack a lot, having graduated only recently, I’m still accustomed to a life that’s devoid of all the creature comforts that most people are used to, so I focus all my attention (and money) on the experience of travel rather than the lodging and boarding bit.

Another way to cut corners in terms of cost is to use a rental to get around the place you’re visiting. Just recently, I flew down to Hawaii for some down time, and decided to go and drive across the state rather than just kick back and relax on a generic beach and while away my time on a tan.

So I went to a car rental place and decided to get myself a nice set of wheels to carry me around the state. I settled for a Honda Accord because of its drivability and mileage figures, but when I started talking prices with the rep behind the counter at the rental, and the topic moved into insurance, things got a little interesting.

My dad worked in the insurance industry for donkey’s years so I knew what I was on about, but turns out most people don’t, and pay the price for it – literally. Here it's the lowdown on insurance coverage for rentals:

Why do you need it? Let’s get this out of the way first; I’m not saying you don’t need insurance, because you most definitely do. The risks are the same as if it was your own car, accidents, fender-benders, hitting a pedestrian, or even the engine blowing up. There are many things that can go wrong that you need to guard against. If you don’t have insurance, any expenses incurred on stuff like this will come straight out of your pocket, and nobody wants that.

Feeding on fear. When you go to a rental to get a car for hire, the salesperson at the rental will ask you about insurance. They will usually try to convince you that you aren’t adequately covered and you need additional insurance. Why? Because that is where they profit, big time. The term ‘peace of mind’ is thrown around a lot, and if you fall for their fear mongering, you’re likely to cough up hundreds of dollars in your weekly rental charges for coverage that you might already have.

Using your personal car auto insurance policy. You are covered by your personal car auto insurance policy, remember that, even if you’re driving a rental, but you need to know to what degree that coverage extends. My advice? Go through your auto insurance policy with a fine toothed comb, and if you have any doubts, call the insurer and get proper clarification.

In fact, conduct your inquiries via email, that way you have proof in case things go south. Make sure you don’t just have the usual like damage coverage, but everything else too. The checklist goes like this – damage, theft, loss of use, third-party liability (in case you injure someone or someone’s property), and theft and/or damage of personal effects. Also look into your deductibles. Deductibles are the cash payout that you opt to cover on your own in an effort to mitigate insurance costs.

See how much you’ll be expected to shell out. If you have a comprehensive policy with a big insurer like The Hartford, you should be covered, but this is only a rule of thumb, so always make sure you check up on the state of your coverage.

Credit Card coverage. A lot of credit cards offer some form of coverage in this regard. It’s not something you can rely on absolutely in most cases though, there are always exceptions, but in general, credit card coverage is secondary and usually only offer theft, damage and collision, if it does offer coverage at all. Again, it’s prudent to look into credit card based coverage to see whether or not you’re covered and to what degree.

If it turns out that you’re not covered by your personal auto insurance policy or credit card after all, you could then go in for an extra policy to help cover your rental. The most common one is primary coverage with a third party – this policy offers you third party coverage for your travels, and keeps your auto policy out of the picture, this is good because if you do have to file a claim, your personal policy’s premium won’t shoot up as a result of it.

This isn’t enough on its own though, because it doesn’t offer liability protection, so you should look into supplemental liability protection too just to cover all your bases. It’s always better to get this coverage before you travel though, rather than wait till the rep behind the rental counter starts asking you questions, and you start to panic. A little planning can go a long way.

Author Bio: Elvis Donnelly, a father of two who works from home. I am a voracious reader and like to keep abreast of current affairs on personal finance, technology and innovation. In my spare time, I love taking on home improvement projects and consider myself a closet chef.
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