Should You Get Rental Car Insurance?

We’ve all heard the sales pitch. “Would sir or madam like to select insurance coverage on their vehicle today?” Now, it’s time to look into the pros and cons of rental car insurance, and their effect on your rental car’s safety, as well as its effect on your wallet. There’s much to consider when it comes to rental car insurance, from different types of coverage to the cost, and even a little “legalese” mixed in.

Rental car insurance can save you a lot of hassle

Rideshare vehicles are seen in a parking lot in Russia
Rideshare vehicles may be the future of car rentals | Mikhail Japaridze via Getty Images

First, it’s important to discuss, on a very general level, how rental car insurance works. Basically, it functions just like your own car insurance policy. You pay a flat fee upfront, usually based on the value of the vehicle and your driving record, and in exchange, the insurance company comes to your rescue should something happen to the vehicle. Ideally, it never does, and that money is spent on nothing but your own peace of mind, or a candy bar. You choose.

That way, if you’re covered, you won’t be fully liable for any damage incurred during an accident. Additionally, insurance on a rental car is separate from your own car insurance. It varies from company to company, but that could mean your own insurance rates won’t go up after an accident. Moreover, some credit cards, like the Chase Sapphire card, offer coverage on rental cars, saving you even more time and money.

Coverage may not always be financially smart

The Avis logo at JFK airport in New York
The Avis logo | Smith Collection via Getty Images

However, it has to be said that electing coverage is not always a good idea. At least, on some level. Rental car insurance is often tiered. For the sake of the example, let’s say there’s full or basic coverage. Full coverage is as armored up as one can get. Should an accident happen, there’s almost no way the insurance company won’t cover whatever damage was done.

Basic, or as it’s often called, liability coverage, is a little more limiting, as the name implies. Generally speaking, that will only cover the most minimal of fender benders. There are also some instances in which electing coverage may not be worth it. Only in for a night? You probably won’t be driving enough to need that insurance. Or, perhaps your credit card covers it anyway. No need to buy coverage twice.

Rental agents are trained in the art of the pitch

A rental car desk, shown with agents filling out paperwork and selling rental car insurance
A series of rental agency desks | Rust via Getty Images

Rental car agents are trained to pitch insurance as hard as possible. I should know, I used to do it for a living. Insurance companies will often incentivize rental agencies to offer their coverage. Then, a rental car company will offer its employees a commission on sales of coverage. With these factors in mind, it should be easy to decide how much, if any, rental car insurance you need.

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