Road trips are already much more expensive than at the same time last year, taking into account the price of gasoline, food, accommodation and a car. The price of a car alone rose 64% for rentals between April 7 and May 26, to $81 per day on average, compared to the same period in 2019, according to reservation company Kayak. For summer (May 27 to September 6), the average price is $101 per day, an increase of 67% compared to the same period in 2019.
Rental insurance — about $8 to $90 per day on average with Hertz, for example, depending on the level of coverage — adds an additional expense. Some drivers may skip rental insurance by finding coverage through their existing car insurance or credit card. But many cannot. They must decide whether to waive or accept a rental company’s policy – a crucial decision that costs you a little now and saves you thousands of dollars in the event of an accident.
Here, insurance professionals explain what to look for and what to do when it’s time to decide whether or not to buy a policy.
Am I OK to waive rental insurance if I have my own car insurance policy?
Not necessarily. Your auto insurance will follow you to your rental, but you may not be as protected as you think.
If you own an older car, you may only be paying for minimal liability coverage. This protects you if someone is injured or their property is damaged in an accident you cause. This does not cover repairing your own car. Repairs to a rental would also not be covered by your insurance, says Janet Ruiz, spokeswoman for the Insurance Information Institute.
Key words to look for on your policy are collision and comprehensive coverage, says Staci Lee, senior manager of automotive products at Farmers Insurance. Collision insurance covers damage that occurs to your car when it collides with another vehicle, hits an object such as a telephone pole, or only involves your car, such as when it rolls over. Comprehensive insurance covers damage resulting from other types of incidents, such as theft, floods or fires.
If you’re leasing your car or owning a newer car on a loan, you’re probably already paying for all damage and collision damage, Ms. Ruiz says, and you may well refuse the rental company’s policy. She waives the rental car insurance herself.
“I have decent car insurance and don’t feel the need for an extra, which saves you quite a bit of money on rentals,” she says.
You should also check whether your policy covers administrative costs, including towing and loss of use. A rental company might charge you, for example, for the time a car is in the store being repaired, Lee says.
Will my insurance premiums increase if I have an accident?
An accident for which you are at fault will affect your policy as if you were driving your own car, Ms Lee says. Some people will pay for the rental company’s policy to avoid this outcome.
What if I don’t have a car? Could my credit card cover me?
Your credit card may offer some level of protection if you use it to pay for the rental.
American Express includes rental car loss and damage insurance on all of its US consumer and business cards, and most Visa cards offer some level of collision damage waiver. Both companies say cardholders should contact their issuer directly for availability, coverage, and specific terms and conditions.
Discover ended its car rental insurance in 2018, according to a company spokesperson.
What if my suitcases are damaged or stolen in the car?
That’s where your home or renter’s insurance might come in, says Ruiz. If you don’t have personal property insurance, rental car insurance may cover these losses.
Are there any other options than paying the rental company’s policy?
Third-party insurers such as Allianz and Bonzah offer additional coverage, often for less than what you would pay at the rental counter.
Allianz’s plan is $11 per calendar day on average, which is generally lower than similar products offered at the rental car counter. Sales are up 30% from the first two months of 2019, spokesman Daniel Durazo said.
What if I use a car-sharing service?
Your first step should always be to check with your insurance and credit card providers to assess your existing coverage, Ms. Ruiz says. Then check what the car sharing service offers.
Some companies include insurance costs in the base price. Turo has built-in liability insurance and the ability to choose different levels of protection that cover physical damage to the car, according to a spokeswoman.
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