Rental Car Insurance
Tip It!Just a quick tip that I was reminded of when traveling recently… Car rental agencies do their best to push their overpriced insurance on you when you’re standing at the rental counter. Be prepared for their sales pitch by checking whether or not your own policy extends to rentals. In our case, it does. As long as we’re driving the rental in place of our own car (like when on vacation) then it’s covered.
If you’re going to be paying with a credit card, you should also check into what sort of coverage the card provides. In some cases credit cards provide secondary coverage that picks up where your own leaves off, thereby paying your deductible. In other cases, a credit card will cover the whole shebang. If you check with both your insurance agent and your credit card company before you depart, you’ll be able to make an informed decision and your savings could be substantial.
Published on August 12th, 2005 - 10 Comments
Filed under: Travel
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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August 12th, 2005 at 10:59 am
This is good advice. However, what I find rental companies try to do is confuse the heck out of you and some I have had even used have tried to scare me into it. However, I am fortunate that the company I work with has deals set up with various companies that all the appropriate insurance is automatically de-selected for me so I don’t need to worry about it.
You give good advice to study what exactly you are covered for. This is the only way to ensure you are not taken for a ride (pardon the pun!!)
August 12th, 2005 at 11:43 am
A side note about renting cars with a consolidator site like Priceline.com, Hotwire.com, etc.:
You can sometimes get fairly good prices with these services. However, make sure everything is as you want it before submitting your request! When you get to the rental counter, just about anything you want to change will cost you. Even adding a driver will cost you, so put it in the person’s name that you want to drive.
August 13th, 2005 at 5:25 am
God…are there really people still using priceline?
But it amazes me that car rental companies are still pushing this insurance, now that they no longer accept any form of payment except credit cards, and even the low-end cards for people with bad credit give coverage for rental cars nowadays.
August 14th, 2005 at 12:32 am
Matt — what do you use? I’ve done well with Priceline because it’s the only place I know of where you can name your price but if you use something better then it would be great to know! Or maybe you’ve had problems with Priceline?
Sometimes the rooms aren’t exactly what I would have wanted but if I get them at a third the price of calling up the hotel I can’t really complain too badly.
August 14th, 2005 at 12:35 am
The cars have been fine, too — didn’t mean to change the focus of the thread.
I used Priceline for the rental car for our honeymoon — and darn it if they weren’t out of the size that we bid on and they had to upgrade us — to a convertible Camaro!
August 15th, 2005 at 12:10 am
When I contacted my insurance agent about the Rental car insurance, he said that it will be advisable for me to take the insurance provided by the Rental Company as in case of an accident, it wont show on my driving records.
Don’t know how legitimate it is and if the agent is just trying to get away and not caring whats in my best interest.
-NS.
August 15th, 2005 at 1:01 pm
NS,
What your insurance agent told you is probably true, but then you are in effect buying insurance for your insurance. Is that worth $20+ a day? I don’t think so.
-Amit
August 15th, 2005 at 1:29 pm
Amit: I couldn’t have said it better myself. Thanks!
August 16th, 2005 at 2:34 am
The only time I ever used Priceline was before I discovered just how stupid it can be to buy a pig in a poke. (I tried to get airline tickets. I ended up paying for tickets that were completely useless, because I needed to fly out in the morning and return in the evening, whereas Priceline’s system allocated me tickets the other way around, effectively shortening my trip by two days and preventing me from actually doing any of the things that I’d intended the trip to be for. I was thus compelled to buy tickets AGAIN, using a real travel agency. They cost maybe $10 more than the useless Priceline tickets I still had to pay for.)
As for rental car insurance…well, I already said my piece on that. Maybe if the agencies still accepted cash or checks it might make sense…but with credit-card-only rules in effect, I don’t see there being many people renting cars who aren’t already covered for free.
August 17th, 2005 at 4:14 pm
True, Matt, if you’re needing to pick your arrival/departure times Priceline isn’t the best — they only guarantee the day.
As for the rental insurance, I can absolutely see why they push it, despite credit-card-only payment. How long does it take the person at the rental car counter to pitch the insurance? A minute, maybe? If the cost of keeping that employee around is $20/hour, then it cost the company 33 cents to pitch the insurance. For a $40-$80 payout (or more!) even factoring in claims, you only need to get a fraction of 1% of the people to take you up on it to break even. That math isn’t hard to justify — I’d probably instruct them to sell it harder!