Should You Buy Rental Car Insurance?

So you are going on vacation this summer and renting a car. Before you log onto the rental car web site or pick up the loaner at the counter, you should think carefully about one of the first questions you will be asked; will you be purchasing rental car insurance?

If your auto insurance includes collision and comprehensive coverage, then this should also cover the rental car within the limits of your current coverage. Also, if you charge the cost of the rental car on a credit card, your credit card may include rental car loss damage waiver as a cardholder benefit.

But don't stop there assuming that because you have auto insurance with collision and comprehensive coverage, or charge your rental car on a credit card, that rental car insurance is a waste of your money. Here are three solid reasons why buying rental car insurance can be worth it.

• In many states, auto insurance policies do not pay for the rental car company's "loss of use" - which is the loss of rental fees by the company while the car is in the shop for repairs. If you want to cover this, then you need to buy the rental car insurance.
• Planning to drive the car out of the country? Before you do, check into the insurance limits required by those countries and you may find that your current insurance is lacking.
• Another thing to consider is coverage for personal effects. When traveling with digital cameras, laptops and iPods, the chance something will get lost or stolen while traveling is higher. The costs to replace these items can really add up. If you have homeowners or renters insurance, particularly the form that includes replacement value coverage for personal property, then your current insurance should cover this. But many folks have increased their deductibles to $1000, $2500 or more to offset rising insurance costs. Only a loss in excess of the deductible will be covered by your existing insurance. Given the relatively low cost of personal effects coverage offered by rental car insurance, which averages about two bucks a day, the additional insurance is worth it.

One last thing to consider when renting a vehicle.  Be sure to do a thorough inspection all the way around, on top and look underneath the vehicle for prior damage.  I recommend using your cell phone to take photos before and after you rent the vehicle.  Your photos may be your only defense if you  are notified after returning the vehicle that damage has been discovered.  Our agency has had 3 claims in the last 90 days from clients that rented vehicles and were later charged by the rental car agency for undercarriage damage.