Should You Get Rental Car Insurance?
Whenever you buy a car, you are legally required to have insurance. Requirements for what kind of insurance and how much vary from state to state, but one thing is clear: you must have coverage, whether you’re leasing a vehicle or you own it.
What about if you’re renting? Many rental car companies will try to sell you rental insurance as part of a package when you rent from them. However, do you really need rental car insurance? The answer is: it depends. Let’s examine rental car insurance and find out exactly when you need to buy rental insurance, and when you should leave it off the bill.
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Do I Need to Buy Rental Car Insurance?
Unlike car insurance for a vehicle that you own or lease, you are not legally required to buy rental car insurance when you rent a car. Instead, it’s the rental car company that must have an insurance policy covering its fleet of vehicles.
However, while there is no legal requirement for renters to have rental car insurance, that doesn’t stop rental car companies from trying to sell it to you. Rental car insurance does help you avoid liability, which can land you in a financial emergency if you get into a bad collision and you have to cover the cost of the accident as well as your own medical bills.
The good news is that you may already have rental car coverage without realizing. If you have an insurance policy on a vehicle that you own or lease, then that policy may already include coverage for rental cars that you drive. It is similar to how an existing policy will cover you when you buy a new car. This is something to ask your agent or provider about, especially if you’re just now getting a car insurance quote.
When Should I Buy Rental Car Insurance?
Rental car insurance is not required by law and, depending on your current insurance policy, you may not need it at all. However, there are some times when you should buy rental car insurance.
If You Don’t Already Have Car Insurance
If you don’t have a car insurance policy right now, then you will be left to foot the bill if you are found liable for a collision involving a rental car. This is a time when a rental car insurance policy could actually help you out. However, this doesn’t necessarily mean that you must buy the first thing that a rental car agency tries to sell you. Before you travel, try shopping around for a policy from a variety of providers and compare those premiums to whatever the rental agency tries to sell you.
Typically, rental car agencies have the benefit of a captive audience when they try to push rental car insurance on customers. By coming prepared with a policy of your own or with competitors’ prices, you can save time and money and avoid a pushy sale.
If You Are Renting a Car for Business Purposes
Most of the time, your car insurance covers damage to vehicles or people as part of your personal use of a car. However, if you’re renting a car for business, your personal insurance policy may not cover any damage to the vehicle as a result of professional use. Before you travel, ask your company what they can do to provide coverage for your rental car. They may have a policy of their own or they may foot the bill for the rental agency’s insurance policy.
If You Are Driving the Car Abroad
Car insurance policies purchased in the United States will cover any accidents that happen in the country, its territories, in Canada, and sometimes in Mexico, depending on your policy. If you’re traveling any further than that and you want to rent a car, then you should plan on finding rental insurance before you leave.
As with before, make sure to do your shopping beforehand. If you wait until the last minute, then the rental agency will take advantage of your desperate position and charge you a markup for their rental car insurance.
You are not legally required to have rental car insurance, but there are some cases in which you should buy it. The key is to understand your car insurance policy — if you have one — and understand the kinds of situations in which you will or will not have rental car coverage.
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Nick Cesare is a writer from Boise, ID. In his free time he enjoys rock climbing and making avocado toast.
This post was updated February 28, 2019. It was originally published April 26, 2018.