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Car Insurance for Rental Cars

May 26, 2011

When you choose to rent a car you may be a bit surprised by how the price starts to escalate from what you were originally quoted.  That is because besides the basic price of car rental, you will also find that you may be charged certain fees and taxes and there may also be hidden costs that you were unaware of.  When you go to sign for the car you will probably be asked whether or not you want to take out car insurance for the car and this might be a question that will startle you because you will probably have already thought that car insurance was covered in the price of the car insurance, which it is.  The car rental agents are good at making you believe that you should take out this extra insurance especially because a lot of them will make quite a bit of money when you do.

So Should You Take Out this Insurance?

Before you can decide whether or not to pay extra for insurance you need to know what will be covered.  These insurance policies will vary depending on the car rental company but most of them will have a few similarities.  For example there are a number of types of cover that they can include which are liability insurance, personal effects cover and loss damage waiver.

It is important to realise that the car is already insured under the car rental company’s policy.  These extra provisions may or may not be required by you but it is worth understanding what they are. 

Liability insurance. The car rental company’s insurance policy will probably already have a minimal amount of liability insurance already.  This will be offered to you because you will probably need more than what is covered by this policy. If you were in a crash while driving the rental car then your medical care and that of any passengers would be covered by liability insurance.

Personal effects cover.  Taking out personal effects cover means that if any of your belongings are stolen from the car, you will be covered for these things.  However, you may already have cover for this in your home insurance policy so check this out before wasting your money.

Loss damage waiver.  This is actually not insurance at all.  What it does is take any liability away from you should you be in an accident that was your fault.  However, there are a number of exclusions to this such as if you cause an accident through speeding or driving while under the influence.

What if You don’t Want Extra Insurance?

It is important to evaluate what is on offer from this insurance policy before you decide to pay for it.  Do you really need it?  Many of the products on offer from the car rental company in terms of car insurance will be things that you are already covered for in other policies.  Make sure that you actually need this insurance before you decide to go for it.  A lot of car rental companies are quite adept at making customers feel that they really need this insurance when they actually could do without it easily.