Every summer as travel starts to increase we are met with the question, “Should I buy the rental companies insurance plan when I rent a car? Is it really worth it?” And every year we give our clients the same black and white answer… it depends.
The personal auto policy is designed to extend coverage to a rented vehicle at the broadest coverage the insured has on their current auto policy. Many people with older vehicles choose to only insure their vehicles for their liability since the value of the vehicle is diminished. If you do not have physical damage coverage on your vehicles then your personal auto policy would not extend physical damage to the rented vehicle either. In that situation you would definitely want to purchase the rental companies insurance to have coverage for damage to the vehicle. But considering that your current auto policy includes liability, physical damage and medical coverage then would it still be worth it to purchase the rental insurance?
It depends because there is more to consider. If you are involved in an accident in the rented vehicle then the rental company could put a hold on your credit card until your insurance company provides payment. This could significantly inconvenience you while traveling. There might be coverages like loss of income that the rental car company would be entitled to collect that your auto policy doesn’t provide. As Insurance Professionals we take the responsibility of educating on risk and advising our clients on best practices. We tend to lean toward purchasing the rental companies insurance. Purchasing the rental insurance can also allow you to keep your own insurance free from claim activity if you do have a loss while driving a rented vehicle. It can also provide you with the chance to lower your deductible if your current auto policy has high deductibles. If you are going to be renting a vehicle outside of the United States then we would highly recommend purchase rental insurance.