Should You Ever Buy Rental Car Insurance?

Here's a question I ask myself every time I rent a car: should I ever buy rental car insurance? Here's what Slate has to say on the topic -- starting with a story that illustrates the situation we all face financially when asked to buy rental car insurance:

On a recent trip abroad, a reputable international car rental company tried to make me an offer I couldn't refuse. As is standard practice in Europe, basic insurance was included in the price, but for just $10 a day, I could protect myself from the frightening-sounding insurance deductible of $900—a sum I risked being charged if anything happened to the car. I bravely turned them down.

This was a strikingly overpriced offering. For each day's rental I was being asked to pay $10 to protect me from the risk of paying $900. The mathematics are hardly difficult: The insurance is fair only if I crash into something every 90 days. If I believed that, I wouldn't get behind the wheel at all.

Here's their bottomline:

The correct response is to insure yourself only against the big risks, such as your house burning down. As for the dent in the rental car, you will simply have to tell yourself that in the scheme of things, it's not that important.

I'd suggest two things as well. First, be sure to know whether or not your company covers you (and any related auto accidents) while you drive on company-related business. And, of course, know the associated company policy regarding whether or not you should take rental car insurance. Second, ask your car insurance agent about your personal car insurance policy and if any of it covers you when you drive a rental car. It may, in which case you'd be double-paying if you take the rental car insurance option from the rental agency.

Comments

[Ricemutt]

Interestingly enough, the last couple of times we've rented a car, we got asked if we wanted to buy insurance to protect against THEIR (the rental company's) loss of revenue from loss of use of the car in the case of an accident. Even the GEICO rep (my auto insurer) mentioned some rental companies had started doing this. What I don't understand is, shouldn't the rental car's business insurance cover that? Why should customers cover the loss of use of an asset? Or is this yet another revenue generation scheme targeted at the unwary customer?

[Zums]

There is more to consider when renting outside the USA. Normally you are NOT covered for collison by your US insurance company. Using a major credit card that provides CDW coverage is very important ... you need to know ahead of time what coverage your credit card(s) provide; they are not all equal. Second, you should seriously consider purchasing liability or you will most likely be very exposed.