Everyone needs to rent a car from time to time; whether it is for travel, to haul heavy loads or just for a night out on the town. Drivers often get confused when they're offered renter’s insurance when picking up their rental car. Most rental car companies push the sale of this type of insurance which makes some customers feel as if they have no choice but to sign up, but do they really?
What is rental car insurance?
Rental car insurance generally covers two things: collision coverage and liability coverage.
Let’s look at these more in-depth:
- Collision insurance – this coverage protects you if you’re in an accident that involves another object. This can be a car, light pole or person. Who’s at fault for the accident really doesn't matter, because collision insurance will protect you. It also covers the expenses of towing your rental car away if need be and replaces the rental car if it’s not operational. Every insurance company has their own limitations of what they will and will not cover, so it’s best to look in the policy itself and not just take the salesman’s word for it.
- Liability coverage – rental car liability coverage protects you in the event that a driver you hit wants to sue you for bodily injury. This policy is more to protect you from third party actions, but it does not protect you or anyone in your car in the event of an accident.
Now while rental car insurance has many added extras such as supplemental rental insurance and personal accident coverage, you are not required to add these extras to your insurance policy should you choose to take rental insurance.
Before you sign that dotted line
Before signing up for rental car insurance, there is one important thing to keep in mind. When renting a car, most companies require you to have a valid credit card on file to absorb any incidental charges or costs. A little known fact is that a variety of credit card companies such as MasterCard and American Express often provide collision insurance for rental cars when you use their card to pay for it. The only downfall to this is that if you're involved in an accident, your credit card company will work in conjunction with your personal car insurance to resolve any claims. This can result in a situation that may cause your premiums to rise. To eliminate any chance of this occurring, you may want and wish to keep these services separate.
On that subject, your own personal car insurance may cover rental cars as well. That is why before purchasing any type of additional rental insurance it is best to check with your primary insurance provider to see if your existing car insurance policy offers this type of coverage before signing up.
If you’re looking for a Colorado car insurance quote or to get more information on collision or liability coverage, give Premier Group Insurance a call at 720-457-1101.