Whenever you go to rent a car, the salesperson will ask you whether you would like to sign up for the optional insurance for additional fee. It typically sounds like a good idea, as it covers most types of damage to the car while it is in your possession for a nominal charge added to the bill. In many cases, the person signs up for the optional rental car insurance without thinking about it any further. However, you may not need to buy the additional insurance to ensure that you are covered from liability. Here are some things you should know before signing up for rental car insurance.
You May Be Covered By Your Current Car Insurance Policy
If you currently have a driver’s license and drive a car, you should already have car insurance. In many states it is illegal to drive without it and most car rental companies require you to show proof of insurance before you drive off with their car. Depending on the state in which your car insurance policy is issued, a rental car is usually covered under your Collision coverage or Liability coverage. Car insurance companies typically treat the rental car as your primary vehicle for the brief time that you are in possession of it.
Paying By Credit Card Typically Means You’re Covered
When you pay for or put down a deposit on a rental car using a credit card, you are probably covered with insurance through the credit card company for both collision damage and theft. In most cases, rental car insurance through your credit card company will be secondary to the insurance you obtained for your primary vehicle, so you will have to file a claim with your insurance company first before the credit card company will pay for anything. Fortunately, credit card insurance for a rental car typically covers things that your primary insurance carrier will not, such as towing fees and the deductible for your primary insurance policy.
Knowing these things about rental car insurance can save you a considerable amount of money when you rent a car. You can save $5 to $20 each day on your rental by utilizing your other insurance and declining the optional policies of the rental car companies. For a weeklong trip, this amounts to a savings of up to $140. I’m sure you can find a better way to use that money while on your trip.