Renting a Car without Insurance
The process of booking a rental car is easy and straightforward. Unfortunately, car rental insurance is confusing and expensive. It is true every rental car comes with a basic insurance policy, but you will require more cover for peace of mind. Car rental companies will also introduce you to various types of insurance when paying for a car. Each of the additional insurance covers comes with its benefits. It will cover part of what the basic insurance leaves out. That in case an accident happens.
The rental company agent will push them hard and even warn you of what may happen if you do not buy any of them. The policies may not sound expensive. For that reason, you may give in and buy them. However, you will later realize that the insurance covers are outrageously priced. What is even worse is that your personal auto insurance coverage may cover the rental car.
So, Can You Rent a Car Without Insurance?
You can rent a vehicle without car insurance. All rental cars come with minimum liability coverage. However, rental companies provide supplemental insurance too. They help you avoid problems in the event of an accident.
Here are the things to consider when deciding on whether to buy rental car insurance.
Your Existing Auto Insurance Cover
In most cases, personal auto insurance covers collision damages to insured cars. It might also cover damages to short-term rentals. Unfortunately, the insurance may limit you to driving within some parts of the globe. So, before you use your auto insurance cover, check what it covers. If it covers rentals in any part of the world, it will be helpful.
Credit Card Benefits
Most credit cards offer free collision coverage for rental cars. To benefit, you will have to use a credit card when booking the rental car. Some credit cards will cover damages and theft of the rented car.
Some credit card companies offer primary collision cover. That means you will not spend any money on this type of insurance. Mostly, they offer secondary insurance. It only covers what you cannot recover from the primary insurance. Again, you will have to pay the car rental company upfront. You can then file for reimbursement from the card provider.
Note that credit card companies will only pay for a loss if the rental company’s log has verified it. Unfortunately, most companies do not cooperate with the providers. They may not provide the documentation in time.
Third-Party Car Rental Insurance
Big travel agencies provide their customers with an option to buy collision coverage. The coverage mainly comes from third-party insurance companies. It is also less expensive than the Collision Damage Waiver. However, you will have to pay the car rental company upfront and then file a claim.
Damage Means More than the Fixed Dents
Car rental companies will charge you more than the cost of fixing damages. They will also charge you for:
The Loss of Use
This means the potential revenue they lost when the car was being fixed. That includes when the rental company has many other vehicles available for rental. They will charge you according to the daily rental charges.
You will have to pay the towing charges if the car is not drivable to the drop-off location. The towing cost may be high, depending on the location.
Diminished value is the potential loss on the resale value of the car. Most rental companies dispose of their vehicles within two years. That means that they will have to consider that when computing for the diminished value.
You will have to pay the administrative fees related to the claim process.
Mostly, supplemental insurance will cover the extras. Still, that will vary from one company to the other, and it might not be forthcoming.
Investigate Before Renting Any Car
Contact your insurance provider to know what their policies cover. You can also read what your health and auto insurance policy covers. Remember to contact your homeowner insurance provider. That way, you will know the covers to buy and the ones to leave out.
Remember to call your credit card providers and the insurance company. Ask for more details on your insurance coverage. Further, ask the type of coverage you will have with the rental car and the exclusions.
Should I Buy Car Rental Insurance?
Rental car insurance might not be necessary. However, rejecting the offers will put you at a big risk for financial losses. You would have to pay for a large percentage of damages if an accident occurred. That is in case your personal auto insurance does not cover rental cars. So, investigate what your personal insurance covers and your credit benefits. You will drive comfortably when covered.
Keep in mind that every insurance policy has exceptions. So, you should know what the policies your car rental company offers leave out. Further, you can reject their offers if you are already covered. You will have nothing to worry about during your travel.
The Primary Types of Rental Car Insurance Policies
The market offers four types of supplemental insurance covers. Each of them comes with its benefits. Here is a brief introduction to each of them.
- Collision Damage Waiver
This car rental insurance cover waives damages associated with a wreck or theft.
- Supplemental Liability Protection
This insurance cover will protect other people and their properties. That is if you are the cause of the accident.
- Personal Accident Insurance
This insurance policy will cover you and your passengers in the event of an accident.
- Personal Effects Coverage
This policy will reimburse you for any personal item stolen from the rental car.
Liability-only insurance is inadequate. It will not cover you safely if the rental car incurs damages. You will need a combination of collision coverage and liability coverage. This guide will help you choose the best supplemental insurance when renting a car.