Whether you are on vacation or just need a rental car while your's is in the shop the rental company will require coverage for their vehicle. Many people have car insurance but don't know if it will cover a rental car. Even if your insurance will cover the rental car does it make sense to purchase their insurance? I hope to answer these common questions about auto insurance and rental cars in this article.
The rental car company will want their vehicle protected with insurance but they don't care if it is theirs or yours. In order to use your car insurance you must have full coverage on the policy which will provide protection for the vehicle. If you don't have comprehensive and collision coverage on the policy you will need to get their insurance.
Most rental companies charge $20-$40 per day for insurance depending on the vehicle you rent so it can be fairly costly. Even if you have full coverage on your auto policy it still may make sense to use their insurance and pay the extra charge.
Why it makes sense to use the rental car company insurance
If you have full coverage auto insurance you have two options with regards to insuring the rental car. You can use your policy or their insurance to protect the car. If you use your auto insurance there is no additional daily charge but if you damage the vehicle and need to make a claim not only will you owe your deductible but you will likely be surcharged in the future for this claim.
The other option would be to use the rental car company insurance which does cost almost as much as the car each day but it does have some benefits. Most of these companies won't collect a deductible if damage is caused and the claim will not go on your claim history or affect your current auto insurance premium. This option can make sense if you are in a new city that you are unfamiliar with and may only be there for a few days.
As you can see there is no one correct answer so depending on the situation it may make sense to purchase the rental car insurance. I hope this helps to make renting a car easier for your next trip.