Should You Purchase Car Rental Insurance?

| August 16, 2019
car rental

You don’t need car rental insurance, you’re covered by your credit card.

Your auto insurance policy offers car rental insurance.

Car rental insurance is a ripoff.

Don’t be a sucker by opting for car rental insurance.

Over the years I’ve received a lot of advice from friends, co-workers, and random strangers on car rental insurance and how it’s simply a big money grab by the car rental agencies. I have friends who swear that they never get car insurance. They consider car rental insurance a big money grab, and that it’s a big scam – essentially if push came to shove and something happened that they still wouldn’t be fully covered.

Despite all the advice I received over the years, I never bought into it. Anytime I rented a car I always opted for the car rental insurance coverage from the rental place. A few months ago I was in Las Vegas on a business trip, so during one of my freebie days away from work I rented a car and drove to LA for the day. Despite being fully confident that I was covered through my credit card, I opted to buy car rental insurance coverage through Hertz car rental.

My biggest reason for opting to purchase full car rental insurance is not so much because of the car, but more so for the third party liability. I consider my self a good driver, and I know it’s out of my control how others drive. However, accidents are called accidents for a reason. They occur unpredictably, and one never knows what can possibly happen, so if you are injured in an accident that is not your fault, you can seek compensation risk free with expert legal help; it’s your legal right to pursue an accident claim, and recover the costs involved in an car accident.

Furthermore, I’ve never read a car rental agreement in full, but I’ve dedicated some time by skimming through various car rental agreements over the years. More importantly, I’ve read a few different articles on car rental insurance policies before writing this post, so I’ll share some of my gatherings in brief.

If you are certain that your credit card will cover your car rental, ensure the following at least:

1. Off Road Driving

Let’s say you rent a car to drive to your friends cottage for the weekend. You get into the town where the cottage is located, but now you’ve got to drive 2 miles through a forest on a rough road to get to the cottage. And as you’re driving along, you stop to see some scenery, a freak storm comes along and a lightning bolt strikes a tree and in turn the tree falls on the hood of your rental car crushing the front of your car.

Nothing to worry about right? You’re covered through your credit card or car rental insurance.

Wrong. A collision damage waiver through your credit card or other rental car insurance will most likely be voided when you drive the car on a gravel, unpaved or any other off-road condition. In the above example, you’re in the forest, which is a rough road and off the main road.

2. Vans or Trucks

Most credit cards that offer car rental insurance coverage don’t cover the rental of vans or moving trucks. They simply don’t want to take on extra liability of a loaded vehicle. So, if you’re renting a cube van for your next move, call your credit card provider and find out if you’re covered.

3. Out of Country

Let’s say you’re planning to head to Europe this summer, and plan to rent a car without buying other car rental insurance from the rental company, because your credit card covers you. Majority of the credit cards and even the best one’s, don’t offer car rental coverage outside of North America. Majority of credit cards that do offer car rental coverage only limit the credit card holders to car rentals within their country and state or province.

In conclusion I’ll add this for those big believers in credit card car rental insurance coverage:

The car rental insurance that is provided through your credit card is only for collision damage to the rental vehicle or the cost to replace the vehicle if it is stolen. If by some bad luck you get into an accident and there are injuries or damage to someone’s car, this coverage will not cover you. You might also think that your regular insurance will kick in. And it might, this depends on on the province you are in and the type of insurance you have.

Most insurance policies across different provinces cover the car and not the driver, so if the car you have insured is not involved in the accident, there is no coverage.

The laws for rental cars also vary from state to state and province to province. Some places require rental car companies to include this liability insurance with the rental. For example in Las Vegas, you’re given the option to purchase it, and without must hesitation I purchased this liability for an additional $15 per day.

Next time you rent a car check with the car rental agent on the different insurance liabilities. And if you’re certain your credit card will cover you, make the call to find out at least what amounts you’re covered for.

Do you purchase car rental insurance or rely on your credit card for it?