Insuring Your Vacation Rental Car: How to Prevent Being Over or Underinsured

While most people take the time before a vacation to research the best rates on rental cars, they generally forget to research insurance coverage for their rental car ahead of time. This can lead to costly mistakes either by being underinsured or by purchasing too much coverage.

To prevent either of these scenarios, car renters should spend a few minutes before a trip to make sure they are adequately insured. Your insurance company will inform you as to what coverage on your own car applies to rental cars. Generally when renting a car for pleasure, your personal auto coverage applies to the rental car. However, if you don't carry comprehensive or collision coverage, you will not be protected if your rental car is stolen or damaged in a collision and you should consider purchasing the rental company's collision damage waiver.

When paying for the rental with your credit card, the company and/or bank which
holds the credit card may also provide coverage. Call the 800 number on the back of
your card for more information. Generally credit card insurance benefits are secondary to personal insurance policies and any insurance offered by the rental car company. Be sure to ask for a written copy of the credit card company's insurance coverage information.

Once this research has been conducted you should have a clear idea if you need additional coverage through the rental car company. Costs and coverage varies from state to state, however, renters generally have the following products available to them:

Collision/Loss Damage Waiver
Costing between $9 and $19 per day, this “waives” financial responsibility for theft or damage to a rental vehicle other than for accidents involving such factors as speeding or driving while intoxicated.

Liability Insurance
While rental companies by law must provide a minimum of liability insurance; the coverage is usually so low that it does not provide enough protection. Supplemental liability insurance costs between $7 and $14 a day for $1 million in liability coverage.

Personal Accident Insurance
For $1 to $5 per day, this offers you and your passengers coverage for medical bills resulting from a car crash. Your health insurance or auto policy personal injury protection may provide adequate coverage.

Personal Effects Coverage
For $1 to $4 per day, this insures against theft of items in the car. Your home or renters insurance policy may also provide this protection.