Insure Your Future

When to Buy Rental Car Insurance

19 May 2020 by Sue Palmer

Some people will tell you that you don't need rental car insurance. The truth is that this advice doesn't apply to everyone—some people need rental insurance while others don't. Below are some of the circumstances in which you should buy rental car insurance.

You Are in the Country Temporarily 

Every driver in the U.S. must have car insurance, including foreign drivers. Depending on your country of origin, your home country's insurance coverage is unlikely to extend to the U.S. (confirm with your company). Thus, you need rental car insurance if you are in the U.S. temporarily, and you want to rent a car.

You Don't Have Car Insurance

As mentioned above, every motorist must have car insurance coverage. The requirement is valid even if you just want to take a spin around the block. Many people who rent cars have their personal cars and their personal car policies extend to their rental cars. However, if you don't have a car or an insurance policy, then you must buy rental car insurance when renting a car.

You Don't Have Existing Alternatives

Your car insurance is not the only source of coverage for your rental car. You may also get coverage from other sources, such as your credit card, travel insurance, or professional organizations to which you belong. However, you will need standalone coverage if you have neither car insurance nor such alternative sources of coverage.

You Want To Protect Your Personal Insurance

Your driving history determines your insurance rates. Even the driving history you generate by driving a rental car matters. Driving history with multiple claims or driving violations will drive your rates up. Thus, if you get in an auto accident with a rental car, it will reflect in your future insurance premiums. However, the effect is more severe if you were using your regular car insurance with the rental car. Thus, you may want to buy rental car insurance to protect your regular auto insurance.

You Are Traveling For Business

Lastly, you should also know that your personal car insurance only protects you if you are driving for personal reasons. Personal car insurance excludes business driving because business driving and personal driving attract different risks. Thus, you should buy rental car insurance when renting a car for a business trip. Long-term rental car insurance, say covering several months, can be expensive if you are not careful. Consult a car insurance agent to learn more about your options.

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