While you're on vacation or your car is in the shop, you may have to rent a car to get around town in the meantime. This convenience affords you a number of benefits, but you'll also need to purchase rental car insurance, which will come at an additional cost.
Though rental car insurance is not mandatory, it is highly recommended in the event any damages occur to your new rental. If you choose to forgo insurance, you could be stuck with tens of thousands of dollars worth of repair costs that you must pay out of pocket. That's why it's always best to chip in a few extra dollars for insurance.
However, insurance options aren't always easy to navigate when it comes to a rental car because there are several different approaches to take. For instance, your standard auto insurance policy could cover a rental car, which would make additional insurance unnecessary if you're looking to save money.
You may be advised to purchase additional insurance in either case, however, according to USA Today. Many rental car companies try to upsell insurance to drivers, even if they are already covered. This is commonly seen in the form of a loss damage waiver.
This waiver covers damages to your car for an additional $20 or so a day. Over a week's time, these charges can add up considerably.
Outside vendors
Like many people, you probably reserved a rental car through a third-party site to get cheaper rates. This is common for people booking hotels, flights and rental cars all in one inclusive package, reported USA Today.
These vendors also offer rental car insurance, which may or may not be honored by the rental company. You may unknowingly buy insurance from one of these vendors, then be told to purchase even more coverage once you go to pick up your car. These overlaps in coverage can cause confusion and a host of excess fees.
A recent rental car customer in Denver, Patricia Genthon, noted drivers typically err on the side of caution and will fork over more money even though it may not be in their best interest, according to USA Today.
"The average consumer assumes the rental companies would have the best product and if they had an accident all would go well," said Genthon. "They think, 'if I used their company they would go easy on me.'"
Doing your homework
It's not always the case that rental companies are working to your benefit. In fact, it's better to plan out your rental car terms well in advance of actually picking up the vehicle. By doing this, you'll be less likely to be pressured into additional coverage at the last second by a rental company representative.
Know that driving a rental car is not inherently riskier than when you're using your own vehicle and that your coverage terms don't need to exceed what you're used to traditionally paying. Since you'll likely only be using the rental for a few days, simple liability coverage could be the way to go because it is the cheapest and most cost-efficient if you are a safe driver.
If you have comprehensive or collision coverage through your car insurance provider, then this coverage usually extends to rental cars as well. Speak with your insurance agent to be sure that you are not being charged twice for the same coverage.
If you do get into an accident, you'll have to pay a deductible, which is something you should keep in mind if you're deciding between insurance options.
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