There Are Four Critical Coverage Areas, Experts Say
Think twice before turning down rental-car insurance on your next trip. Even if you already have an auto policy, experts say, you should read its fine print—and check with your carrier—before determining if you'll need additional coverage for a rental car.
If you're planning to rent a car and have no auto policy, evaluate your need in four areas:
1) A loss-damage waiver, in case the car is stolen or damaged:
2) Liability insurance, which covers you in the event of a lawsuit;
3) Personal accident insurance, which covers medical bills if you or your passengers are injured;
4) Personal-effects coverage against theft of belongings.
Without auto insurance, you might still have adequate coverage in one or more of these areas. For example, your health-insurance plan might provide adequate personal-accident coverage, while your homeowners or renters insurance might cover your belongings. But without an auto-insurance policy, you might be left high and dry when it comes to loss and damage to the vehicle you are driving. Worse, if you cause an accident (liability coverage), you could expose you and your family to financial ruin. Some credit-card providers offer limited liability or other coverage, but it might not be sufficient. Offerings vary by card, and coverage depends on your net worth.
Similarly, rental-car companies are required by law to attach state-mandated levels of liability insurance to each rental. In Arizona, this is $15,000 to any one person whom you might cause injury, and $30,000 total to all persons injured. Most rental-car firms allow you to pick categories of supplemental coverage while not duplicating coverage.
If you rent a car often, it might pay to invest in a non-owner liability policy, which will cover you for a year. Rates vary by provider and by state, but typically cost $300 to $400 a year---again, depending on your age and risk category.
No one likes to pay money for insurance, but it is the responsible thing to do to protect you, your family and your things. Rental car companies do make it relatively inexpensive.
Just a reminder to keep your needs in mind the next time you rent.