What You Need to Know When Buying Rental Car Insurance

If you’re thinking of a wellness staycation this summer and need to rent a car to drive to the destination, you may need to think about rental car insurance. Do you need car insurance when you rent? Perhaps yes. Perhaps no. Another reason to rent a car may be if you are planning to stay in a particular destination for an extended period of time and want to explore the area without always having to take a taxi or Uber.

In many cases, a car rental company will ask if you want to buy rental insurance. Often, it can cause a dilemma. Is the rental car insurance really necessary? Or simply a way for rental companies to increase their revenue? On the other hand, you may worry that something will happen to the car during the rental period.

It’s not often easy to think and decide right on the spot. So, if you need a rental car to drive to a destination or once you arrive at the destination, you should be armed with at least the basic knowledge about renting a car and car rental insurance. Here are just a few things you should know.

Knowing the kinds of coverage that rental car insurance offers is important.

  • Collision or loss damage waiver, which covers damage to the rental car.
  • Supplemental liability protection covers injury or damage to other property or people.
  • Personal effects coverage insures against the theft of the rental car you are using.
  • Personal accident insurance provides medical benefits to the person who rented the car and its passengers if there is an accident.

Your existing coverage may suffice If you are renting in Canada or the U.S.

You may not need car rental insurance if you are renting within Canada or the U.S. Your existing auto insurance policy may cover it. Most auto policy already covers liability, and if you have a comprehensive collision plan, it may include coverage for theft of or damage to the rental car. You should check your existing insurance – auto, health and homeowners, for instance – to see what each policy covers. For example, if there is an accident, your health insurance may cover it. On the other hand, a homeowners’ or renters’ policy may cover the theft of items left in the car.

Check your personal insurance and credit card policies if renting a car internationally.

Car rental insurance overseas varies depending on your destination, credit card, and personal insurance. Your auto insurance generally will not cover you while on an overseas trip. However, major credit cards cover pre-existing conditions (PEC) and collision damage waiver (CDW), so you do not need additional car rental insurance. However, some credit cards do not cover vehicles rented in specific countries. So you should definitely check with the credit card company before you travel.

You should also check the inclusions in your travel insurance. For example, if it includes collision coverage, you can decline the offer from the car rental company. Otherwise, you might only need to purchase a CDW (collision damage waiver.)

It is important to check your insurance policies before you travel because you may already be covered.