Should I Purchase Rental Car Auto Insurance?

By Compuquotes Team on April 23rd, 2009

Auto Insurance

Many people rent a vehicle when they are on vacation or in their own home town and the rental car company will bombard you with a bunch of extras, including rental car insurance. The big question on the minds of most rental car takers is whether or not they need the rental car insurance or if it is an expense they really don't need. The answer to this depends on the type of auto insurance you have on your own vehicles.

If you carry collision, comprehensive, personal liability and property damage insurance on your own vehicle, and you are going to be driving a rental car in the United States or Canada, your existing auto insurance should transfer to the rental vehicle with the same insurance, limits and deductibles.

There are some rental car companies that require you to have extra auto insurance coverage that you don't have on your own policy - if this is the case, you may have to purchase some extra insurance from the rental company. However, you can just purchase the extra insurance, such as collision or comprehensive insurance as an umbrella to your own insurance policy, even if you just want to increase the limits of your auto insurance for the rental vehicle.

When you go to rent a car, it's important to know the rules of renting a car and about the company you are renting from. If you get into an accident with your rental vehicle, most insurance companies pay for collision and comprehensive claims, as well as property damage and personal liability. The collision and comprehensive will pay out the car's cash value - that is the replacement value of the exact same vehicle. The conclusion of the price that the insurance company will pay includes the mileage on the vehicle, the age of the car and the wear and tear on the vehicle. Chances are that the insurance will not cover to place the vehicle with a new one and the rental company may surcharge you for wrecking their vehicle. Some rental companies will charge you for the diminished resale value of a vehicle if it has been damaged. Some also charge for loss of rental income while the damaged vehicle is being replaced or repaired.

These extra charges are why it is imperative that you find out what charges you will be responsible for in the event of an accident. If they offer insurance for events that your insurance doesn't cover, it would be wise to purchase the insurance. You can also talk to your own insurance agent about the coverage that you would have on a rental car. Some insurance companies treat a vehicle that you rent just like it was your own vehicle. However, it's important to check with you insurance company and the rental car company that your insurance is adequate for covering the vehicle.

If your auto insurance policy was written in the United States it is only valid in the United States and Canada, sometimes Mexico as well. If you're leaving the continent and travelling elsewhere, you need to find out from the rental car companies in that area what their insurance requirements are. Chances are that your insurance policy from the US or Canada will not be valid in countries elsewhere, however it is advisable that you speak with your agent to find out for sure.

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