car insurance

Rental car insurance – yes or no

If you’ve got a job (congrats), you might be taking a vacation from it this month and renting a car to help you get away.

In that case a helpful and charming rental-car rep is sure to get around to asking the big question: “You want the insurance on that?”

Many savvy travelers think the smart answer is a firm “no.” They have personal car insurance, which covers them in rental cars. The rental-car company’s insurance is just another $50 or more on the credit card for nothing they don’t already have.

All the fine print and insurance jargon jammed on to the rental agreement doesn’t help. And neither does knowing that your “agent” probably isn’t an expert and wouldn’t give you the straight story, even if he was.

So, here’s a little help. Your personal auto policy probably does cover your liability behind the wheel of a rental car. That means it probably will pay the guy you rear-end at the light because you were busy programming GPS coordinates.

But let’s suppose you smacked into the back of a garbage truck and did a real number on the front end of your rental rig. Let’s say that unit is out of commission for a while or, heaven forbid, a total loss. What then?

Well, this is an example of where you might have been smarter to pay for the rental-car company’s insurance, or at least the loss damage waiver, also known as the collision damage waiver.

Maybe your personal car insurance would pay for damage to the rental car.  Some policies do. What it might not pay is revenue lost to the rental-car company as a direct result of your at-fault encounter with the Tourist Town Municipal Waste transporter. If that piece is coming out of your hide because you didn’t buy the insurance, it could add up to a lot of dough in a little time.

So, here’s my advice. Before you vacate, take a few minutes to understand what your car insurance shall and shall not cover relative to rental cars. Then, when they pop the question at the rental-car counter, you can make an educated decision that won’t have you working to pay off the rental car company from now until your next vacation in 2015.