Should You Buy Insurance on Your Rental?

When you’re standing at the rental car counter, you will be faced with an important question-should you pay extra to purchase the rental company’s insurance and waivers or should you save your money?

Before you make the decision, you need to understand what coverage you may already have for rental cars. Your personal auto insurance coverage, limits and deductibles extend to some of the damages incurred in some of the vehicles you rent but it may not cover all the damages the rental company holds you liable for after an insurable incident. Fully or partially uncovered expenses include:

    • Loss of Use: While your rental car is off the road and in the shop, the rental company could be losing money. If they can prove a loss through a fleet utilization log indicating that no other cars were available to rent in place of that vehicle, your insurer may cover some of the related financial damage, but they may not cover the entire amount which will make you personally responsible for the remainder if you waive the rental company’s coverage.


    • Diminution of Value: An accident can reduce the value of a vehicle when it shows up on the vehicle’s Carfax history report. This lost value can be passed on to you and while your insurer may pay the portion of damages they find reasonable, it could leave you exposed to paying the remaining amount if you’ve refused the coverage offered by your rental company.


    • Administrative fees: Additional time and manpower goes into working with you and your insurance company on claims. This additional expense is passed on to you through administrative fees that are not generally paid by your insurance company. Normally, these fees are waived if you’ve purchased coverage through the rental car agency. Jacksonville party rentals


  • It’s also important to note that rentals for business purposes, long-term rentals and international rentals may be excluded from your personal coverage so be sure to call your agent to get the details of your policy before you assume it will cover you.


Another source of coverage you may have is through the credit card you use to pay for the rental. Generally, credit cards offer the repair or replacement of a rented vehicle that was damaged or stolen. They may not, however, cover the fees for loss of use, diminution of value or administrative fees and they may exclude certain vehicles and rental periods. For details, call the credit card company you plan to use to pay for the rental.

What Rental Insurance and Waivers Cover

The rental company will likely present you with several options for rental insurance to replace or supplement coverage in your personal policy. Examples of rental insurance options include:

  • Collision Damage Waiver – This is basically a hold harmless for damage you unintentionally cause to the rental car. It’s not really insurance but it does mean that the rental company won’t come after you for damages. If looking for a coverage equivalent in your personal property, look to your collision and comprehensive coverage limits and deductible.

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