“Would you like fries with your meal?” “Would you like the extended warranty for your new stereo… just $30?” Like most “offers” from salespeople, the one who benefits most of the time is the merchant, not the client. So you arrive at the airport car rental station and they could not be nicer. However, they speak to you as if you would be crazy not to take the extra insurance they are offering. It does this for you and it does that for you. Some companies even ask to see your current insurance card, knowing most people don’t carry it and then imply that you must purchase their wasteful “insurance.” Truth be told, for most people, it’s a complete waste of money.
KNOW WHAT YOUR INSURANCE ALREADY COVERS
Before you rent, find out what your credit card and personal auto insurance offer, and then supplement what they don’t through the rental agency. In most cases, you won’t have to supplement anything. If you have personal car insurance with comprehensive and liability, it most likely will cover your rental car. Call your insurance company in advance of travels to verify. Filing a hefty claim with your insurance, keep in mind will probably raise your premium. Having said that, even if you purchase the car rental companies insurance, your personal policy probably requires you to report it to them anyway. Thus, your premiums will probably go up anyway.
Credit Card Rental Car Insurance can be primary or secondary. Primary means it’s the first line of defense. Secondary means it’s secondary. If it’s secondary coverage, you’ll be forced to involve your primary personal auto insurance company and file a claim before you can get anything from your credit card company.”
So to recap, before you go away, give your insurance company and call. Nine times out of 10 they will tell you that you are fully covered in a rental car. Then also call your Credit Card Company and ask them. Most American Express cards have coverage as do many Visa and Master cards. Lastly, assuming the accident is not your fault, your insurance company will most likely subrogate (go after the other person’s insurance company) the claim so they won’t have to pay and nor will you. Remember, car insurance deductibles might still apply even if you are not at fault. Best practices; call your insurance company and your credit card company before you go away. Most people do not need to through money away for a third layer of insurance when renting a car.