What You Need To Know About Insurance Before Reaching The Car Rental Counter

Source: National Association of Insurance Commissioners
Date: Nov. 14, 2007

A large percentage of U.S. consumers are confused about whether to buy insurance when renting a car, according to new research by the National Association of Insurance Commissioners (NAIC). In fact, many people purchase insurance at the rental counter without knowing whether their existing auto policies or credit card benefits already cover their needs.

“When renting a car, many consumers purchase unnecessary insurance and end up wasting money. Meanwhile, other drivers inadvertently underinsure their rental car, placing themselves at risk,” said NAIC President and Alabama Insurance Commissioner Walter Bell. “As travel increases around the holiday season, the NAIC encourages consumers to investigate whether their existing auto insurance provides sufficient protection for car rental.”

Prior to renting a car, the NAIC recommends that renters ask the following questions:

- Ask your insurance agent: Are there any situations in which my existing auto policy would not cover a rental car?

- Ask your credit card company: What are the limitations on rental car coverage?

- Review your auto insurance policy or call your insurance agent before you reach the rental car counter.

- If your current policy doesn’t offer coverage for a rental car, see if an insurance rider can be added for a small fee.

- Many credit cards include some level of collision and theft protection. In most cases, these benefits are secondary to your personal auto insurance or the car rental company’s insurance, meaning the credit card company will only pay claims after other insurance coverage has been exhausted. The NAIC recommends you call your credit card company and ask about benefits.

- If you lack personal auto insurance and your credit card does not provide benefits, it might be wise to purchase the liability insurance and collision damage waiver at the car rental counter.

- Keep in mind that if it is a longer-term rental (e.g., a week, a month or more), there might be limitations on the coverage your existing auto insurance policy provides. Check with your insurance company or agent for details.

- If you don’t own a car, you might want to consider purchasing a non-owner auto insurance policy, because it provides benefits in addition to coverage for a rental car.

- When traveling on business, a personal auto policy will generally not apply, so check with your employer for guidance.

- Know that you are not alone if you find car rental insurance confusing. If you are unclear about the car rental insurance options, or are concerned that a rental company is misrepresenting information, check with your state insurance department.