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Do You Need Rental Car Coverage?

Auto insurance is required by almost every state in the country – which means most of you reading this article have it. The insurance that covers you while you are driving your own car also covers you while driving in someone else’s car, including a rental car. Which means that when you rent a car while on vacation you may be tempted to take out the insurance plan that the car rental company offers you. It’s not necessarily a bad idea to take that insurance, although it isn’t necessarily required either. Let’s look at both sides of the equation.

You Take the Insurance: If you take the insurance offered by the rental company, then you may pay anywhere from $10 to $30 per day depending on the insurance you take (rental car companies offer accelerating tiers of coverage). If you have an accident or the car is damaged and the claim is covered by the rental company’s insurance plan, then your insurance company won’t know about it (unless it results in a ticket) and it generally won’t prompt an increase in your premium.

You Don’t Take the Insurance: The cost of the rental insurance can often be the same as the cost of your rental, effectively doubling your car rental fees. By not taking the insurance you will save yourself money. However, you could be adversely affected by any claims that you have while driving the vehicle. Since your insurance company would be responsible for those claims, it could even affect future insurance premiums for many years to come.

If you still aren’t sure whether or not to take the rental company’s insurance, consider this – your credit card company may offer rental car insurance privileges. Call them and ask for details of any such plan.

While it’s nice to know that you are covered with your normal car insurance for rental issues, it might also be nice to separate your personal insurance policy from anything that occurs while you are driving a rental car.

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