Should you purchase rental car insurance?
If you’ve ever rented a vehicle, you've probably been asked about whether you want to purchase insurance on the rental car. The agent at the rental company may have really pushed for it, but it isn’t always clear if it’s the right decision for you. When you’re driving a car that isn’t yours, the idea of complete coverage – just in case – can be appealing, especially when car repairs can be really expensive. Here’s what you need to know about rental car insurance.
It’s incredibly expensive.
You may not have ever looked at the itemized bill if you’ve taken rental car insurance, but the rate for getting insurance is sometimes close to the daily rate for the car itself.
The actuaries for the car rental company have done their research: they know that the number of major damage claims to their cars are few, so they will collect a lot of money on the chance it could happen but only have to pay the few times it actually does.
It may cost you more than the damage.
Sometimes, even with rental insurance, you may have additional costs for damage sustained to a car while you were driving it. The insurance may pay for the claim, but if the company can claim a loss of revenue (i.e. – they can’t rent it out while it’s being repaired) you may be responsible for the amount of money they’re losing by not being able to rent it out. Additionally, you may be charged with administration fees for processing the claim paperwork – even if you opt to take the insurance.
Some rental insurance policies truly offer comprehensive coverage, but not all of them do. Before deciding if this is something you want to do, it’s important to read the coverage and determine exactly what you are paying for.
You’re probably already covered.
If you have your own car, and are just renting while you’re on vacation, your own personal auto insurance may be able to help. Most personal insurance plans have provisions in place to cover you when you’re driving someone else’s car – and that includes rental cars. Check with your auto insurance provider before waiving coverage with the rental car agency.
It will be important however, for you to check what your coverage actually is, and to make sure it’s sufficient to cover any damages that might happen while you’re driving.
The downside to this is that, depending on your insurance provider, you may have to pay up front for any damages and then submit a claim to be reimbursed for the cost.
If you have travel insurance or even homeowner’s insurance, there may be benefits in those policies that cover you when driving a rental car as well. Before deciding on whether you want rental car insurance, you need to check the other forms of insurance you have to see if you already have coverage.
Driving someone else’s car can make you nervous, so knowing you have insurance coverage just in case something happens can make you feel a little better, even with rental cars. Rental companies will often try to hurry you into the rental agreement and agree to taking the rental insurance, but that doesn’t mean you have to. Even if they tell you how expensive damages can be – and that part is true – you may have coverage already so you don’t need to buy more that you won’t end up needing to use. Doing a little research before agreeing to car rental insurance can help you save some money, and time!
Contact ICD Insurance today!
If you are in need of auto or home insurance, or if you would like a second opinion on the policies you already have, we can help. Call us today at 905-830-9000 to speak to one of our agents.