Do need rental car insurance geico
If you’ve ever rented a car, you’ve probably been warned by salespeople at the counter about the possible consequences of walking away without buying their company’s rental car insurance. Put on the spot, you might not feel confident about exactly what your current auto insurance covers. And that’s what rental companies are counting on — along with their commissions for selling you the coverage.
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Want to be prepared next time you’re renting? We can help you understand whether you need rental car insurance and how to get it before you get to the rental counter.
Rental car insurance or your own auto insurance?
Here are the typical insurance options from rental car companies, along with how to determine if you already have coverage within your own auto insurance policy. Coverage from your own policy applies when you are using a rental car for personal, nonbusiness purposes. The rules may be different for business use of a rental car. Check with your insurer or employer for details about coverage when using a rental car for business.
Crashes and car theft
At the counter: A loss-damage waiver (LDW), also called a collision damage waiver (CDW), gets you off the hook for any damage to the rental vehicle or theft of the car. It’s technically not insurance but rather a waiver that says the rental car company won’t come after you.
Your policy: If you have collision and comprehensive coverage on your own policy, it generally will extend to a rental car. However, you will still be on the hook for your deductible.
Damage you do to others
At the counter: Supplemental liability protection will pay for damage you do to others’ vehicles or property. A typical limit is $1 million. If you have no auto insurance (for example, if you don’t own a car), you should buy this.
Your own policy: Your own liability insurance will cover you when you’re driving rental cars. If you have really minimal liability coverage on your auto policy, you could buy the supplemental protection to boost your coverage. But if that’s your situation, you’d be smarter to increase your own liability coverage anyway.
Injuries to you
At the counter: Personal accident insurance covers medical costs for you and your passengers if you’re involved in an accident. This includes ambulance, medical care and death benefits.
Your own policy: If you have health insurance, this coverage would largely be redundant. Similarly, if you are interested in death benefits, you should have a life insurance policy. Personal accident insurance also is not needed if you have personal injury protection or MedPay through your auto policy.
Your stolen stuff
At the counter: Personal effects coverage pays for your belongings if they’re stolen from the rental car, up to a set dollar amount.
Your own policy: Your homeowners or renters insurance will cover your possessions if they are stolen, even away from home. To make a theft claim, you’ll need to file a police report, and your deductible amount will apply.
The credit card safety net
Credit cards often provide coverage for rental cars, assuming you have used the card to pay for the rental and the rental is in your name. You’ll automatically have this coverage if it’s included with your credit card — no need to call or sign forms. But it is secondary coverage, meaning your own auto insurance policy will pay out first. NerdWallet assessed credit cards that offer good rental car insurance.
If you don’t have auto insurance and are going to count on credit card coverage, call your credit card issuer to confirm the details.
Buying rental car insurance on your own
There are companies that sell standalone policies for rental cars if you don’t want to buy insurance at the counter. You generally need to decline the rental company’s coverage to use these.NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. Start here to maximize your rewards or minimize your interest rates. Amy Danise Get a quote
Insure My Rental Car
Insure My Rental Car offers loss damage waivers covering up to $100,000 in damage to your rental vehicle. You can purchase coverage for anywhere from a day (starting at $7.50) to a year (starting at $93.99). The policy provides primary coverage so you don’t need to use your own auto insurance first. Policies also extend to rentals outside the United States.NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. Start here to maximize your rewards or minimize your interest rates. Amy Danise Get a quote
Allianz Global Assistance
Allianz Global Assistance sells a Rental Car Damage Protector for $9 a day that pays out up to $40,000 for damage and loss. It’s primary coverage, so it pays out before your own auto insurance, and includes 24-hour emergency assistance.NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. Start here to maximize your rewards or minimize your interest rates. Amy Danise Get a quote
Protect Your Bubble
For $7.99 a day, Protect Your Bubble, from Assurant, covers your rental for damage or theft. It also includes coverage for personal effects and is good worldwide. For another $2.99 a day you can add 24-hour roadside assistance.
Updated Dec. 9, 2015.
Amy Danise is an editor at NerdWallet, a personal finance website. Email: email@example.com. Twitter: @AmyDanise.
You’re standing at the rental car counter with a long line behind you. You got a great rate on a car for the week, and you’re ready to go on vacation with the family. Then, you’re handed a clipboard with an intimidating rental car contract filled with confusing insurance options. Suddenly, you wish you’d spent less time packing and more time researching rental car insurance.
Here’s your chance to be prepared at the rental car counter so you can be on your way faster, and you’ll keep the people in line behind you happy.
I have car insurance. Do I really need to buy their coverage, too?
This is the most common question when it comes to renting a car for domestic travel. The answer is: it depends. You want to make sure you’re covered, but you also don’t want to pay for unnecessary duplicate coverages that could double the price of your rental.
The first step is to check your auto insurance policy, or contact GEICO to see what type of coverage for rental cars may already be included in your personal auto insurance. If you carry comprehensive and liability coverage on your personal car, coverage typically will extend to your rental car. If you’re renting a car of similar value to your personal car, in all likelihood the insurance coverage will be adequate for the rental. But if you’re off to a blowout beach weekend in a slick set of wheels like a Corvette Stingray and you’re leaving your 2008 Subaru Forester at home, the extra coverage offered by the rental company may be a good idea.
You should also check with the credit card company—the credit card that you’ll be using for your car rental. If there are any gaps in coverage with your personal auto policy, the credit card company could provide secondary coverage.
Rental Car Coverage Defined
Know before you go. Most rental companies typically have a short, predictable suite of offerings. Check your auto insurance policy to make sure you’re already properly covered and you may be able to decline the offered coverage at the rental counter.
Insurance You May Have Already
Liability coverage. This is a basic component of most car insurance policies. If you have adequate liability coverage on your own vehicle (check with your insurance provider), you may choose to skip this one.
Personal accident insurance. This covers your medical bills in the event of a crash in the rental car. As long as you have personal injury protection or medical payments coverage on your auto policy and reliable health insurance, you may not need this coverage.
Protection You Might Need
Collision Damage Waiver (CDW)/Loss Damage Waiver. This is not an insurance product, but rather a waiver that transfers financial responsibility from you to the rental car company in case of damage or theft. In most cases, waivers also provide coverage for “loss of use” if the rental car company charges for the time a damaged car can not be used because it is being repaired.
Personal Effects Coverage. If you have a homeowners, renters or condo policy, your personal items will generally be covered even if they are stolen from a rental car. Review your policy documents to be sure before you elect or decline this coverage.
Next steps: To learn more about your policy and car rental coverage, call us at 1-800-841-0728 or review your policy documents on geico.com.
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Confused about whether or not to buy extra insurance when standing at the rental car counter? Join the club.
Often times, people end up buying supplemental insurance protection that they really don't need, said Odysseas Papadimitriou, CEO of credit card comparison site, CardHub.com. That can add anywhere from $15 to $30 a day to the cost of a rental.
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"The majority of consumers are covered by their own auto insurance, but they may not know it," he said. "They may be spending extra money when they don't have to."
And those who aren't covered by their own insurance, are likely covered by their credit card, he said. All four major credit card issuers, Visa (V), American Express (AXP), MasterCard (MA) and Discover (DFS), provide some form of rental car insurance coverage. Although, MasterCard issues a few cards that don't offer coverage.
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CardHub rated the card issuers based on the extent and length of the coverage they provide, how clearly they state what's covered and how easy it is to get claims paid. American Express (AXP) received the highest rating of 90% for its car rental insurance; Discover (DFS) was second at 88%; MasterCard (MA) third at 79%; and Visa (V) ranked last at 74%.
To make sure you get covered, you must charge your entire car rental on your credit card and decline the supplemental collision damage coverage offered by the rental company. If you sign up for that insurance, you won't be covered by the credit card company.
Coverage from your credit card comes with restrictions, though, said Papadimitriou. Several types of vehicles aren't covered, including trucks with open beds and off-road vehicles, as well as exotic or expensive cars like Ferraris or Jaguars. And American Express doesn't cover certain popular SUVs, such as Chevy Suburbans, Ford Expeditions and Range Rovers.New smart car tech already saving lives
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Visa and MasterCard may not cover damages that occur on dirt or gravel roads and other cards don't cover wheels and rims. Some card issuers cap rental periods at 15 days, after which the insurance lapses. None of the card issuers will insure a rental car for more than 30 days straight.
Rental cars in some countries are not eligible for credit card insurance. The ones most often named include Ireland, Israel, Italy, Jamaica and Australia.
One other important note: Unless your personal auto insurance also covers business use, your personal policy won't cover damage caused when you're renting a car for a business trip.
Drivers who aren't sure about their coverage should call their credit card company before they leave for their trip.CNNMoney (New York) First published June 30, 2014: 6:04 AM ET