Do I need insurance when renting a car?
Before you accept or decline insurance at the car rental counter, find out what is—and more important, what isn’t—covered under different policies.
“Would you like to add insurance?”
If you’ve ever rented a car, you’ve probably been asked that question. And, if you’re like many customers, you may not know how to answer. You want to make sure you’re protected, but perhaps you’re already adequately covered by your auto insurance policy, your credit card or other policies.
So, when should you answer “Yes,” and when are you clear to say, “No thanks, I’m covered?” Start by asking some questions—before you get to the counter.
1. Does your current auto insurance policy cover rental cars?
If you already have auto insurance, consult your policy or check with your insurer about coverage and ask the following questions:
- Does this policy cover rental cars?
- What and whom does your policy cover? Can anyone else operate the vehicle? Does the coverage extend past collision damage to liability, personal property, theft, etc.?
- Is the coverage adequate for the type of vehicle you plan to rent?
- Does your current policy act as the primary insurance for the rental?
- Most insurance policies have a deductible, an amount you must pay before coverage kicks in. What’s your policy’s deductible, and is it the same for rental cars?
2. Does your credit card offer auto rental collision damage waiver insurance?
Many credit cards, including all Bank of America consumer credit cards, offer some insurance for car rentals.1 (This coverage is secondary if you have an existing personal auto insurance policy.) Call your card issuer, or review your card benefits guide, to find out about the specific terms, conditions and exclusions. For example, certain kinds of vehicles may not be covered.
Credit cards with this benefit typically cover physical damage to, or theft of, the rented vehicle, with no deductible. If you get into an accident, any damage to the rental car is covered, as long as the rental agency verifies the losses and coordinates with the benefit provider. However, most cards do not cover damage to other cars or property, or any liability that arises, including injuries to people.
To be eligible for your credit card’s coverage, you must generally make and pay for the car reservation with the card. You must also decline the rental agency’s collision damage waiver—as well as any offers for coverage, which you might get from third parties when you book the car.
Some rental agencies request a letter of eligibility when you use your credit card for coverage. Check with your card issuer to determine how you can get one if it’s needed. Also confirm how the coverage works if someone else is driving the car. Most coverage through a credit card extends to all drivers authorized by the car rental company, but you should check to be sure.
3. When does it make sense to purchase insurance from the rental company?
If you do have coverage through your credit card or personal auto insurance, consider whether you want any additional insurance offered by the rental car company. You might opt for supplemental liability insurance if you aren’t protected by a personal policy. Or you might purchase personal effects insurance if you are worried about having items stolen from the rental car (although homeowners and renters insurance often covers this kind of theft).
If your credit card or personal insurance policies provide adequate coverage, the additional expenses are probably not worthwhile. But if you do decide to purchase insurance from the rental company, be sure to ask about its terms and conditions. What is covered? Which drivers? What’s excluded?
Whatever your decision, it’s crucial to understand what you pay for and what you’re ultimately responsible for when renting a car.
- Certain terms and conditions apply. Please refer to your Benefits Guide for details.