Supplemental Rental Car Insurance and Optional Damage Waivers Can Cost a Lot But May Protect You From Loss

Don't automatically assume that your current policies and credit cards will completely protect you

Supplemental Rental Car Insurance and Optional Damage Waivers Can Cost a Lot But May Protect You From Loss
Image: NCCC
February 14, 2018

In the past, most people declined supplemental insurance offered by rental car companies. But you might want to rethink that decision. With rises in the cost of doing business, many rental car companies are hitting drivers with all sorts of fees for any damage done to the car in order to recoup costs, even if the damage was there before you took possession of the car.

Not cheap, but rental car companies like to nickel and dime

Supplement insurance offered by rental car companies isn't cheap. There's a pretty hefty markup, especially since it's typically targeted toward drivers who don't have insurance, whose insurance was canceled, or whose insurance doesn't meet minimum requirements, such as liability only. Costs for this coverage can add up quickly.

collision damage waiver isn't insurance

You may have seen the check box on the rental agreement to decline the collision damage waiver and loss damage waiver offered by the rental car company. It's not really insurance in the usual sense of the word. You're just paying a fee to get let off the hook if the car is damaged or stolen.

It can be wise to purchase this waiver, especially since the cost is usually reasonable. Typical insurance might pay for most of the damages done to a rental, but not all damage or fees, such as loss of use or diminished value. It can also help you out if you fail to notice damage that was done to the vehicle before you drove off

personal accident coverage

Personal accident coverage includes medical bills, ambulance costs and even death benefits for you and your passengers. But you probably don't need this coverage since you more than likely have it included in your primary auto insurance or health/life insurance policies. A rental car agency may even be required to have this coverage built in by law depending upon where you are.

Personal Effects Coverage

Personal Effects Coverage takes care of theft of your possessions from the rental car. It only goes up to a certain dollar limit, so it won't cover too much. But many homeowners and renters insurance policies already covers you for possessions stolen from your car, be it yours or a rental. If you regularly travel with expensive items, you may consider opting for this protection to help cover your loses.

Research first; check the boxes later

If you wait until you're at the counter signing your paperwork to decide on which coverage, if any, you want from the agency, you're out of time. Before reserving your car, you should have already checked your other insurance policies to see what kind of coverage carries over to your rental. Don't automatically assume that your existing policies or your credit card protections will cover you in case of a loss. You should also get in the habit of taking precautions to ensure you aren't unjustly charged for damages that you didn't cause.