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Reader Q: Should I Get Car Rental Insurance?

Cars are a pain if you ask me, but Craig wants to know if he should buy rental car insurance. Little does he know he may already be covered.

Let’s get straight to it:

I’ve got a car rental coming up on a trip to Maryland pretty soon, but I’ve noticed that when I add insurance to a rental it usually doubles the price of a rental. I keep hearing that car rental insurance is mostly a scam, but don’t I really need it?

Cheers,
Craig

Craig,

Well, yes. You should have car insurance of any kind when you’re operating a vehicle. By the way, all foreigners who aren’t used to driving should take note here. I’ve heard too many stories about unsuspecting European tourists getting into accidents without insurance.

That said, there’s a reason why people usually say the car rental insurance that you buy from the agency is a scam. Not only is it super expensive, but most people generally don’t realize that they’re probably already covered without knowing it.

Most people are usually covered by the first two ways:

  • You have car insurance. You may already be paying for rental car insurance; of course, you’ll need to check your specific policy with your insurance provider.
  • You own a credit card that may already has it. You should know the specific details of your credit card rental coverage before you assume you are covered. For instance, the Chase Sapphire Preferred doesn’t cover rentals that go for over a month. Check this Consumerist list—updated last six years ago!—for specifics but call your credit card company to make sure things haven’t changed. You will need to put the cost of the rental on the card.

The thing is most people tend to stop looking at their primary auto insurance policy or credit card benefits after they receive it. I usually opt for the latter, because I own the Chase Sapphire Preferred and it provides auto collision damage just in case you get into an accident. (I should point out it includes no liability). The Points Guy has a quick breakdown explaining what it is:

This coverage waives the right of the rental car agency to pursue the renter for [physical auto] damages. This is the coverage most commonly found on credit cards’ rental insurance policies. This may have a deductible. These waivers may cover theft, vandalism, or other damage. However, in most cases, it does not cover loss of use, administrative fees, and the deductible, typically $500.

It’s important to note that what’s covered in your rental may vary among different banks and credit cards. The one thing, though, that you may need to figure out is whether that insurance is primary or secondary. Some cards offer primary insurance, but most, including the Sapphire Preferred, offer secondary insurance instead. All that simply means is that secondary insurance tends to go into effect after your primary insurance has been exhausted. Now, I haven’t owned a car in five years, so the credit card car rental insurance tends to act as my primary insurance. Some travelers have reported that this has been sufficient even when they get into an accident.

Primary insurance tends to take the form of car insurance you may already have or any supplemental insurance you buy directly with the car rental agency. In the case of my credit card, I know I have to decline the rental agency’s insurance in order to qualify for the secondary coverage on the card.

Hope that covers it and drive safely!

Map Sherpa

If you have a travel-related question, don’t be afraid to contact me or send me an e-mail at [email protected]. You can always trek up a mountain to find me too, but you probably don’t want to do that, baa.





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