Do I Need Rental Car Insurance?

By Compuquotes Team on March 27th, 2008
Auto Insurance

If you are out on a vacation or need to rent a car in your home town, the rental car company offers a lot of extras, and one of those extras is rental car insurance. The question is if you really need the auto insurance coverage when you rent a car or if it is an extra expense that you don't really need to incur-it depends on the auto insurance that you already have.

If you currently carry collision, comprehensive and liability coverage on your auto insurance policy and you're going to be driving your rental car in the United States or in Canada, your existing coverage should transfer to the rental car with the same deductibles and limits.

Some rental car companies may require you to have additional auto insurance coverage that you don't carry on your own insurance policy-in this case, you would have to purchase some extra auto insurance coverage from the rental car company. You can just purchase the extra insurance, such as comprehensive or collision to be an umbrella to your own insurance policy or if you just want to increase your limits on your insurance for the rental vehicle.

It's important to know the ins and outs of renting a car and the company that you are renting from. If you are in a collision with your rental car, most car insurance companies will pay for comprehensive and collision claims at the car's cash value, which is replacement value of the exact car. This payment factors in the age of the car, the mileage and wear and tear on the vehicle. This payment from the insurance company likely wont cover the replacement cost of the vehicle and some rental companies will charge the customer if they wreck a car. Some other rental companies will also charge customers for diminished resale value of the rental car that was wrecked and/or charge for the loss of rental income while a damaged car is being repaired.

Before you rent a car from a rental company, find out what charges you could be responsible for. If they offer insurance to cover those events that your own insurance will not cover, then it is a good idea to purchase that extra coverage. Find out from your auto insurance company what they will cover on a rental car-some companies will treat your rental just like your own car, and you may not have to worry about it. It's important to check with both the insurance company that you deal with and the rental car company that you are using to ensure you have all the insurance coverage you need on your rental vehicle.

Auto insurance policies that are written in the United States are usually only valid in the United States and Canada. If you are leaving the continent, and traveling somewhere else, you will need to call the rental car company to find out what the insurance requirements are for that area. If you do travel out of the US and Canada, your auto insurance will not likely be valid for any rental car you rent. Always check what the insurance requirements are in the country you are visiting to ensure that you are fully covered.

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