Back to Basics: Don’t Pay for Unnecessary Insurance
Occasionally using public transportation isn’t an option, and that means a rental car. You shop around for the best rate for your location, arrive at your destination, get to the desk, go over the paperwork, hand over your license, and then you get the question, “Would you like insurance?”
If you don’t travel much, you may be tempted to say yes - whether from feeling pressured into saying yes (feeling irresponsible if you say no), or because you’re thinking it’s only an extra $10 or so a day, what’s the big deal.
It is a big deal, at least for the car rental companies. Offering the insurance option, and convincing you to take it, provides a very health profit margin for the company — AND it’s the rare circumstance where you actually need it. I don’t mean “need” in terms of having to submit a claim, I mean “need” in the sense that most drivers are already covered.
If you currently own a vehicle that is insured, your policy will cover you if you are driving another vehicle. That includes a rental car. Of course, the same policy limits (the amount paid per claim) and deductible apply to the rental as to your own vehicle. If you have any doubt about your coverage, check with your insurance company and get your questions answered before you need to rent a car.
Another source of insurance may come from your credit card company. Most credit cards offer the same type of insurance offered by the rental company when the rental is charged to the credit card. You can stack that coverage on top of your personal coverage, and see that a third coverage (for an additional charge) is unnecessary.
Also, remember that insurance offered by the rental car company is offered to protect the rental car company, and not you. The company is concerned with making sure that if a car is damaged, someone else will pay for the repairs and lost revenue while the car is out of service. The coverage is narrow and limited, and is not a full coverage policy, so you wind up paying a very high premium for insufficient coverage.
What if you don’t have a vehicle or insurance:
- Check with a few of the major automobile insurance companies and see if a short term, full-coverage policy is available.
- Then check with your credit card company to determine the coverage that it offers. If you’re a member of AAA, check to see if there is coverage available through your membership.
- Finally, and as a last resort, your only option may be to take the insurance offered through the rental car company — but make sure you’ve investigated your other options first.e of your own, and want to make sure you are protected while renting a car?
If you are renting a luxury or exotic car (like a Ferrari to drive around Hawaii), it’s a good idea to check your policy to see if there are any exclusions that you should be concerned with.
Photo credit: Cepolina
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POSTED IN: Car Trips, Money Saving Tips, Travel Tips
7 opinions for Back to Basics: Don’t Pay for Unnecessary Insurance
Astroprof
Nov 19, 2007 at 1:46 pm
Very good advice, when renting a car for your personal use. However, some insurance companies will try to get out of paying claims if you rent a car on business trips, unless having the car is not part of the trip. The credit card insurance, though, should still be good no matter why you are using the card.
Mary Jo Manzanares
Nov 21, 2007 at 8:57 am
If you’re driving the vehicle for the same purpose as you have your car insurance, there isn’t a problem. For example, you drive your personal car to and from work, and you are covered. If you take co-workers to lunch, ditto. It doesn’t change if you’re on a business trip, as your use is still the same.
Totally different rules apply if you are a “for hire” driver or something.
Of course, this doesn’t mean that the insurance companies won’t try to weasel out of paying. That happens all the time, and is part of the criticism of the industry.
Personally, I’ve only had very minor problems — more like long delays cut short. But, I’m pretty assertive about the whole situation.
Alex-Sirened
Nov 21, 2007 at 1:29 pm
Yeah, last time we rented a car of course we were pressured into buying insurance but didn’t do it. Then he told me that since my car was a 96′ (albeit a BMW) that I should be aware that my insurance may not cover the total cost of their new vehicles in the event of a major wreck. I was like whatever, I have a $100 deductible.
Two years ago though we did get pressured into buying insurance for the super crummy rental truck we used to move. That was REALLY expensive for 2 days.
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Nov 22, 2007 at 3:24 am
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Hil
Nov 23, 2007 at 7:35 am
Regardless of the kind of insurance you use, make sure to keep proof of coverage in your rental car.
Mary Jo Manzanares
Nov 25, 2007 at 12:01 pm
Many states require you to carry proof of insurance on your person (i.e., in your wallet with your drivers license).
That’s a good idea, even if not required, because you should have your license on you no matter what car you may be driving. If you leave your insurance card in your glove box, you may not have it with you when you go to rent a car, or drive a friend’s car.
Hil
Nov 25, 2007 at 2:48 pm
I’m glad that isn’t the law here. Nine times out of ten, I can’t even find my wallet. :p
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