Should You Get Insurance for a Rental Car?

 One of the big questions people often have when they’re traveling is whether or not they should get insurance for a rental car. Renting a car and driving in an unfamiliar place can be stressful in and of itself, and you want to ensure you’re protected.

When the rental car company offers you insurance at the time you rent the car or pick it up, it can be extremely tempting to take them up on that, but is it a good financial decision?

You may even face warnings from the people who work at the rental car counter about not taking their insurance, and that might push you into doing it, even if you’re not sure that you need to.

When you’re planning your next family vacation if you’re on the search for car insurance for 7 days or rental-specific car insurance, what should you know and what makes the most financial sense but will still keep you and your family financially protected?

What’s Available in Terms of Rental Car Insurance?

When you’re at the rental car counter, there are different types of insurance as outlined by Allstate that might be available to you.

One of the main types of rental car insurance is called a loss damage waiver (LDW). This can also be called a collision damage waiver (CDW). With this type of coverage, you’re not actually getting insurance. What you’re getting is a waiver saying the rental car company won’t try to come after you.

If you have an insurance policy for your own vehicle, it will usually offer you a similar level of coverage, as long as you have both collision and comprehensive coverage. You do have to keep in mind that you’ll still have a deductible under your own policy that you’ll have to pay for. If you had the LDW, you wouldn’t have to pay for the damage, so it is something to think about.

As far as something for the damage you might do to someone else’s property or vehicle, at the counter, you might be offered supplemental liability protection. If you have liability insurance, you’re covered in this area, although if you have extremely limited liability coverage you might want to extend this a bit at the rental counter.

Other at-the-counter options might include personal accident insurance, which is intended to cover the medical costs you or your family could incur if you’re in an accident and personal effects coverage, which is for the items you keep in your rental car, protecting you if they were stolen.

What About Your Credit Cards?

You have to remember when you’re weighing whether or not to get insurance for a rental car that if you have credit cards, they likely offer coverage as well. Your credit card coverage is automatically included with the card itself, so you don’t have to do anything extra to activate it or sign up for it.

It’s secondary coverage, however, so your insurance policy pays first.

If you don’t have your own car insurance policy says Bank Rate, you should speak with your credit card company about the details of their coverage.

What If You’re Traveling Internationally?

If you’re taking your family trip out of the country, there are additional considerations when it comes to rental cars and protecting yourself.

For example, your insurance company might not offer protection if you’re renting a car in a foreign country.

There are also different traffic laws and driving conditions, so you may be at more of a risk than if you were driving in the U.S., so you might want to go ahead and get the additional coverage when you rent a car.

Filing a claim in a foreign country can be a challenge, so if you get coverage while you’re there, it can make it less of a hassle.

Other Forms of Coverage

Before taking the options from the rental car company, says financial expert Dave Ramsey, there are other places you might want to verify and see if you already have coverage. For example, while it’s not extremely common, your homeowner's insurance policy or even your rental insurance policy might cover your belongings even if they’re stolen from a rental car your family is in.

If you’re buying travel insurance, which is something people often do for foreign trips, in particular, you might want to ask the company if collision coverage is available for rental cars.

A lot of the additional coverage is secondary, though, so if your family doesn’t already have car insurance you will still need to buy it from the rental car company.