On The Road Again – Do You Need Rental Car Insurance?

Jun 6, 2021

As the United States emerges from pandemic-induced shutdown, many drivers will find it necessary to rent a car – for work, vacation or as a temporary replacement for a primary vehicle. Invariably, they’ll face a decision of whether or not to purchase additional insurance from the rental company. We spoke with our own Mitzi Lewis, Director of Oakbridge’s Private Client Group, to gain some insight to this timely question.

With a bit of prior planning and research into existing policies and benefits, Ms. Lewis says what is sometimes a daunting task can be made a bit easier by doing a little bit of research before you reach the rental car counter. Here’s her list of considerations as we head into the summer months:

  1. Review your Existing Automobile Policy. A very first step is to know if your existing coverage extends to vehicles you rent. If not, you’ll definitely need to add insurance to your rental agreement. If the rental is covered, dive a bit deeper and review the kinds of coverage you currently carry. Remember, auto insurance covers the driver, not the car. If, for instance, you don’t carry comprehensive coverage on your primary vehicle, it won’t apply to rental vehicle should someone vandalize the rental while you’ve got it under contract. The same rules apply to your deductible and coverage limits.
  2. Consider the Costs, Part I. Think about the obvious costs of the additional premium versus the hidden costs should you have an accident or be found at fault for an injury. If you are renting a car as a replacement for a car that’s in the shop, you’re most likely driving normal routes in a location well known to you. You may be less likely to have an accident than on a business trip to a new city. Weigh the risks and non-monetary costs (your time, hassle, etc.) of losing use of the rental vehicle. Also, remember should something happen to your rental, your deductibles will automatically go to the rental company in addition to any out-of-pocket expenses you’re incurring on your own car’s repair.
  3. Consider the Costs, Part II. If you’re on vacation, chances are you’ve already spent a good deal of money before leaving town. Vacation time is precious and limited. Do you want to forfeit a rental car that’s been disabled or simply have it replaced as part of the temporary insurance? Do you want to waste a day or even several haggling with the rental company to get a replacement? What’s the value of your time off and your family’s enjoyment?
  4. Check For Additional Coverage. Many premium credit cards, car rental loyalty programs and corporate travel offices offer coverage when using their products and services. Read your terms and conditions or call a customer service representative. If you’ve purchased trip insurance, ask upfront if rental car insurance is included.

If you’re still unsure, Ms. Lewis advises contacting your insurance agent with your concerns and your questions. They will be able help you make a sound decision by reviewing your existing policy, recommending alternatives to additional coverage or even writing additional endorsements to your policy that will protect you regardless of your decision.

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