If you are at fault in an accident, supplemental liability insurance can cover all damage done to another driver’s vehicle, your rental car, as well as medical costs associated with injuries. But it could increase the cost of a rental car by $30 a day and may be unnecessary.
It can be difficult to know what amount of coverage is a waste of money and what is absolutely necessary for your protection.
Fortunately, there are a few basic things to consider when deciding if supplemental insurance is worth the cost. The information below details the types of rental car insurance and provides a guide on how you can determine what amount is right for you.
Types of Rental Car insurance
First, let’s take a look at the different kinds of supplemental car insurance. These are your options, should you decide to buy extra coverage.
This is a basic liability policy that you purchase from the rental car agency for about $15 or $20 a day. It is necessary and may be required by law if you do not have your own auto insurance policy.
But if you do already have coverage, there is little advantage in adding this on.
Collision Damage Waiver
This is an upfront fee—usually around $10 to $30 a day—that covers damage you cause to a rental car. It also covers things like theft or non-accident damage to a vehicle, like vandalism. Sometimes there are exclusions, so you want to be sure you are aware of those.
Personal Accident Insurance
This usually entails a small fee of less than $10 a day and covers medical costs to anyone in the rental vehicle during an accident. You should consider purchasing this if you don’t have adequate health insurance or your own auto policy does not cover these costs.
Personal Effects Insurance
This covers any personal property lost as a result of theft. If you are traveling with expensive items, like laptop computers or jewelry, this policy would kick in if someone steals these items.
If you have homeowner’s insurance, it may provide adequate coverage for such incidents. Check with your policy to find out.
When You Need Supplemental Insurance
There are a few specific situations where supplemental auto car insurance is necessary. If you find yourself in one of these, the extra coverage will be worth the nominal cost.
When Your Personal Insurance Is Insufficient
The auto insurance you have for your own car may very well cover rental cars, but it is a good idea to make sure. Be aware that the same level of coverage translates to the rental. So, even if you have coverage, it may be an inadequate amount for the rental car.
For example, if you drive an old car and you only have liability, you might think about upgrading to collision or comprehensive insurance for the rental. This would cover all variables, including weather damage or accidents where you are at fault.
Also, remember that different states require different amounts of coverage. If you are driving a rental car outside of the state where you live, make sure your policy is adequate.
When Traveling for Business
Even if you have personal car auto insurance, your policy may not cover business use. So, if you are renting a car on a business trip, supplemental liability insurance may be necessary to fill in the gap.
Check with your plan to see what it covers. Also, see if your company covers rental car insurance for travel.
When Traveling Overseas
While your current auto insurance may cover you from state-to-state, it is unlikely that it is applicable overseas. If you are taking a vacation and plan to rent a car while there, you will want to ensure that you have proper coverage for that country’s standards.
Alternatives to Supplemental Insurance
Beyond the variables regarding your existing (or lack of) personal insurance, there are a few other options to the rental company’s plans. Here are some final considerations to make before adding supplemental insurance.
Beef up Your Current Policy
For people who regularly use rental cars, you may consider updating your current personal auto insurance policy. This may be cheaper in the long run, and it can eliminate the hassle of constantly purchasing mini-plans.
Note that, even if you do not own a car, you can still buy a non-owner insurance policy. These are good for people who frequently rent cars, and can be more affordable than buying the rental company’s policy each time. Similarly, you can purchase temporary car insurance plans that run from a day up to a month in duration.
A reputable insurance agent can help you navigate the different options available for your lifestyle. They can help you get coverage for what you need, but avoid paying for plans that are overkill.
Use Credit Cards
Many major credit cards offer auto insurance for rentals, including collision. This usually requires you to pay for the entire rental with that card, and it only kicks in when other policies are exhausted. But it can be a handy backup coverage.
Also, these plans usually only apply to short-term rentals, with limits set at 15 days. Like with other policies, you will want to be aware of the limits associated with your card.
Make Sure You Are Covered
Now that you have an idea of your options for gaining adequate coverage for rental cars, you can decide whether supplement insurance is necessary or not. By definition, all insurance is a gamble, but you don’t want to be on the losing side of that bet. Have the peace-of-mind that you are covered for the unforeseeable.
At Amistad Insurance Services we help people throughout North Carolina find auto insurance catered to their lifestyle. We also offer home, health, business, and life insurance policies.
Our consultants will help you identify the best insurance plan for your particular needs. And we look at every variable to make sure you are getting the lowest possible rate.
Also, we offer 24-hour service, seven days a week. So, we can help file your claim and stay involved until the process is completed.