Not sure if you should purchase rental car insurance? Get the facts here.

You’ve made it through a long flight and you’re finally at the rental car counter. The agent smiles and asks that dreaded question: “Do you want rental car insurance?”

You’ll need to decide if purchasing insurance from the rental car agency is worth the extra cost.

Your mind races. Do I need rental car insurance? Is it worth the money? Doesn’t my regular car insurance cover me?

Being put on the spot can be stressful, especially if you’re not confident about what coverage you already have. In this article, we’ll look at what rental car insurance covers and whether you actually need it, so your next trip to the rental counter can be worry-free.

Do I Need Insurance to Rent a Car?

The short answer is no, you don’t have to have your own vehicle insurance to rent a car. But rental companies generally have only minimal coverage on their vehicles, so if you get into an accident, you could be on the hook for a substantial repair bill. If you don’t have your own insurance, you have a couple of options: you can purchase insurance from the rental company or use the protection offered by your credit card.

Does My Car Insurance Cover My Rental Car?

Here, the short answer is yes. If you have auto insurance, it will cover your rental car. That said, you’ll want to review your insurance policy to see exactly what coverage you have. While rental car insurance is similar in some ways to regular auto insurance, the types of rental car insurance are different.

• Collision Damage Waiver
  Also known as a loss-and-damage waiver, this is a waiver, as opposed to a true insurance policy. It says that if the rental car is damaged or stolen, the rental company won’t hold you responsible. Do you need it? If you have collision and comprehensive coverage on your car insurance, this protection might be included in your policy.
• Supplemental Liability Protection
  This protects you if you damage other vehicles or property. Do you need it? Your own liability insurance should cover you. Check your policy to see how much it pays and if you want to boost coverage.
• Personal Accidents Protection
  This protection covers medical costs for you and any passengers if you have an accident. Do you need it? You may already be covered on your personal policy if it includes personal injury protection or medical payments coverage.
• Personal Effects Coverage
  This covers your personal belonging if they’re stolen from your rental car. Do you need it? Homeowners or renters insurance would cover you up to a certain amount.

Does My Credit Card Cover My Rental Car?

Most major credit card companies, like Visa, Mastercard, and American Express offer some sort of rental car insurance as a cardholder benefit if you use the card to pay to rent the car. Generally, it is secondary insurance, which means that if you get into an accident or your rental car is stolen, your auto insurance will be billed first, and your deductible will apply to the claim.

Some credit card companies offer primary rental car insurance in which the claim doesn’t go through your personal insurance and you don’t have to pay a deductible. If you’re planning on renting a car, check with your credit card company to see exactly what type of rental car coverage they offer. Make certain the card and the rental are both in your own name.

When Do I Need Rental Car Insurance?

So how do you decide if – and when – you’ll need to purchase rental car insurance? Let’s look a t few different scenarios:

• You Don’t Have Car Insurance
  Keep in mind that driving without insurance is against the law in most states and could lead to serious legal and financial consequences. At a minimum, if you don’t have any type of insurance, you’ll want to purchase liability coverage and a damage waiver for the rental car. You may also want to get damage protection as well. In this situation, experts advise against using rental car insurance from your credit card company because it generally doesn’t provide enough coverage if you get into an accident.
• Your Insurance Doesn’t Have Collision and Comprehensive Coverage
  Collision covers damage to your vehicle caused by an accident. Comprehensive covers theft, damage from weather, fallen trees, etc. If your personal policy doesn’t have collision or comprehensive, consider buying a loss-and-damage waiver so that repairs will be covered if you’re involved in an accident or if the rental car is damaged.
• You’re Renting a Car for a Business or Overseas Trip
  Your personal policy may not cover renting a car for work or business travel. In some cases, it may not cover your personal vehicle if you’re traveling for business. You’ll want to check with your insurance provider for coverage details. Your personal policy will probably not cover you when you travel internationally, either. For peace of mind, it might be best to purchase insurance from the rental car company, as even minor damage can add up to a major repair bill.
• You Want to Avoid Paying a Deductible
  If you use your personal insurance to protect your rental car, you’ll be responsible for paying a deductible in the event you get into an accident. If you buy insurance through the rental car company and have a collision, no deductible is required.

To Buy or Not to Buy?

You’ll need to decide if purchasing insurance from the rental car agency is worth the extra cost. Check your personal auto policy to see what’s covered, and also take a look at what protections your credit card offers. You don’t want to pay for coverage you don’t need, but you don’t want to put yourself at risk just to save a little money. Having all the facts means you can step up to the rental counter with confidence. If you have questions or need assistance, reach out to your financial institution.