Do I Need Rental Car Insurance or Is My Personal Car Insurance Enough?

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The need for rental car insurance depends on your personal situation and appetite for risk.
Anyone who’s ever rented a vehicle has dealt with the dreaded rental car insurance scenario. You feel pressured to purchase one of the insurance packages, but you’re not sure if you really need it. Obviously auto insurance is a necessity, but if you already have insurance for your personal vehicle, do you need to double up with the insurance from the rental company?
The answer isn’t black and white. It depends a lot on your situation and level of comfort with risk. You might be fine waiving the rental company’s insurance for a day or two on a business trip, but would feel more comfortable with it if you’re renting for a week-long family vacation. What’s important, then, is knowing exactly what you’re getting from your personal insurance company so you can figure out what the best option is for you and your vehicle.

What Does Your Personal Car Insurance Cover?

Everyone’s auto insurance plan is different, so you’ll have to familiarize yourself with your personal car insurance plan to know how it will help you with a rental car.
Your plan automatically has liability coverage, and likely (but not necessarily) collision coverage. Collision coverage takes care of damage to your vehicle in the event of an accident. Finally, you may or may not have comprehensive coverage, which covers your car in non-collision scenarios, such as natural disasters, fires, vandalism, etc.
If you don’t have collision or comprehensive coverage, you should absolutely get rental car insurance. With your personal vehicle, you can opt to not pay for pricey repairs for your car, but you have no such choice with a rental car. If the car you’re renting gets totaled while it’s parked, and you don’t have comprehensive coverage, you’re on the hook for every last penny.
When in doubt, call your insurance provider and see what your plan covers, and how it applies to a rental vehicle. There are often factors, such as the value of the rental relative to the value of your personal car, that may alter or void your insurance altogether.

Your Credit Card May Help You

When you rent a vehicle from a rental agency, you have to pay with a credit card. In most cases, credit cards offer rental car insurance coverage as part of their package. Each credit card company is different, so give yours a call and see what they will cover for you.

What Does the Rental Agency Offer?

Rental car insurance features comprehensive and collision coverage, meaning you won’t be responsible if your rental car gets damaged, regardless of your personal insurance plan. In most cases, you also won’t have to pay a deductible (rental car insurance is usually more of a waiver promising that the rental company won’t charge you for incidental damage to the vehicle).
Even if your personal insurance plan or your credit card will adequately cover your rental car, you may want to consider rental car insurance for one reason: Lost time coverage. If you opt to rely on personal insurance, you’ll not only be on the hook for the damage to the rental car, but for the money that the rental agency is losing by not having the vehicle in their arsenal.
In most cases, your insurance company won’t cover this lost time. In other words, if your rental vehicle gets in an accident and needs two weeks’ worth of repairs, your insurance company may cover the repairs, but you may have to pay the rental agency two weeks of opportunity cost.
It’s always better to be safe than sorry, so if you’re ever in doubt, simply get the rental car insurance; it’s usually affordable. However, if you want to get the best deal, check in with your insurance provider, as well as your credit card company, to find out whether the extra coverage is really necessary.