Do I need separate rental car insurance?

This is an entirely different issue than trip cancellation or travel insurance. However properly insuring a rental car can be confusing, frustrating and an unpleasant experience. You’ve probably spent some time getting to your destination and now all you want is to get a car and get going. Sound like you? Well I know it’s me give me the keys and let me hit the road.

Unfortunately many of us this party included do not even think about car rental insurance until we get to the counter and are faced with what seems like 100 options the rental agent is offering. If we make the wrong decision that could result in costly mistakes such as wasting money by purchasing unnecessary coverage or having dangerous gaps in coverage.

Before renting a car I suggest that you make two phone calls—one to your insurance agent or company representative and another to the credit card company you will be using to pay for the rental car.

For domestic US rentals here are questions to ask and/or information to obtain from your insurance company:

Determine what type and how much coverage you currently have on your own car. In most cases, whatever coverage and deductibles you have on your own car would apply when you rent a car providing you are using the car for leisure/pleasure not for business.

If you have dropped either comprehensive or collision on your own car as a way to reduce costs, you will not be covered if your rental car is stolen or damaged in an accident.

Check to see whether your insurance company pays for administrative fees, loss of use or towing charges. Some companies may provide an insurance rider to cover some of these costs, which would make it less expensive than purchasing coverage through the rental car company. Keep in mind, however, that in most states diminished value is not covered by insurers.

Questions to ask and/or information to obtain from your credit card issuer for US domestic rentals:

Insurance benefits offered by credit card companies differ by both the company and/or the bank that issues the card, as well as by the level of credit card used. For instance, a platinum card may offer more insurance coverage than a gold card.

Credit cards usually cover only damage to or loss of the rented vehicle, not for other cars, personal belongings or the property of others. There may be no personal liability coverage for bodily injury or death claims. Some credit card companies will provide coverage for towing, but many may not provide for diminished value or administrative fees. Some credit card companies have changed their policies, too, so you may not have as much coverage as you thought.

To know exactly what type of insurance you have, call the toll-free number on the back of the card you will be using to rent the car. If you are depending on a credit card for insurance protection, ask the credit card company or bank to send you their coverage information in writing. In most cases, credit card benefits are secondary to either your personal insurance protection or the insurance offered by the rental car company.

If you have more than one credit card, consider calling each one to see which offers the best insurance protection. Stay current with your coverage and call your credit card company before every trip as items including insurance tend to change.

Make a decision on the data that you collected. I ask plenty of “what if this happens” questions when speaking with my insurer and credit card folks. Then you will make an informed decision and hopefully will have obtained the proper coverage and peace of mind.

International car rentals change the game. Again contact your insurance agent, credit card company and booking source-your travel agent, web site, etc to find out what you need to do to be properly insured. Requirements will change country by country so please do your homework.

Got travel questions? Email thetravelprofessor@gmail.com.