Client:   “I’m getting ready to go on vacation and will be renting a car.  The rental car company tried to sell me rental car insurance.  Should I purchase it?”

Me:  “Yes.  Yes you should purchase the coverage.”

Client:   “Really?!?  Don’t I already have the coverage on my current auto policy?”

During the summer months this is one of the #1 most frequently asked questions in our agency.  I totally get why my answer confuses the clients at American Insurance & Financial Services.  The mindset in most cases is:  my current auto policy includes collision & comprehensive coverage, then this should cover the rental car within the limits of my coverage.  Also most people charge the rental car on a credit card.  A lot of credit cards include rental car loss-damage waivers as a benefit.  Therefore, most clients decide that rental car insurance is a waste of money.  When they call the office they are looking to be validated that they don’t need the coverage.

But in fact the rental car coverage can have gaps.  One example is that in most states, auto insurance policies don’t pay for a rental car company’s “loss of use”.  This is the “cost” the rental car company incurs due to the loss of rental fees while their vehicle is in the shop.  If you want to cover this then you need to buy the rental car insurance.

Also, if you file a claim on your personal auto policy for an accident you caused with a rented vehicle, then your auto insurance company may mark you as a higher risk driver.  Most likely the accident occurred because you were driving in an unfamiliar vehicle in an unfamiliar are.  This could increase your auto insurance premium. Might be wise to pay for a couple of days of rental coverage then risk years of higher premiums.

So when you rent a car next time – buy the coverage!