I am going on holiday and will be renting a car. Do I need rental car insurance?
There is nothing worse than getting off a long flight and finding yourself at the rental car counter having to focus your jet-lagged mind on whether you need all the ad-ons the salesperson is trying to offer you. The reality is that rental car insurance is often – but not always- redundant. It is quite likely that you are covered through other avenues for any potential losses should you find yourself in an accident with the rental car.
If you have your own car insurance on a licenced vehicle, you may be covered under that policy for collision damage, liability coverage, and accident benefits on the rental vehicle. Also, if you’ve purchased travel insurance, some policies (very rarely) include car rental collision coverage.
Some level of rental car insurance is a benefit frequently offered by credit card companies as long as you pay for the rental vehicle with your credit card. The coverages will vary depending on the card and may be capped at certain monetary amounts and limited for a time period. Some cards will provide you with coverage for collision damage, theft, towing costs, and liability. Depending on the country you are in, your coverage may exclude costs which are higher risk in certain countries. Credit card benefits only provide secondary coverage so, they will only pay out if you don’t have other coverage somewhere else. Credit card benefits usually do not cover personal property and medical benefits, but you may have coverage for these losses through your travel insurance policy, private extended health benefits or home insurance policy.
Do your homework prior to making your trip so you don’t end up unnecessarily spending a wack of dough at the car rental counter!