“Should I buy insurance for a rental car?”  This could be one of the most asked questions by our customers here at Thome Insurance Agency.  My answer is :

  1. Probably
  2. Definitely
  3. Not this time

You are probably thinking that my answer is not very helpful, but allow me to explain.

Here is an important concept to understand when trying to answer this question.  When you rent a car,  you will be signing a contract between yourself and the rental car company.  If you think insurance policies have fine print and are difficult to understand, you haven’t seen anything yet until you examine the rental car contract!  And each rental car company has its own contract.

Generally speaking,  the insurance coverage that you carry on your own car will apply to your rental car.  If you injure somebody while driving the rental car your auto insurance policy will respond to the injury the same way as if you were driving your own car.  If you carry Comprehensive and Collision Coverage on your car, these coverages will apply to damage to the rental car.  However, here is where problems begin.

As I said earlier, when you rent the car, you sign a contract with the rental car company.  Look at this section of the rental contract for a car that I rented.   Note the wording “you are responsible for any and all loss of or damage to the car resulting from any cause.  No insurance policy I have seen covers “any and all loss of or damage”. Your auto insurance policy has exclusions, limitations and conditions.  You are bound to these policy provisions with your insurance company.  The rental car company is not. But you are bound to the contract you signed with the rental car company for “any and all” damage to the rental car.  So while your auto insurance policy provides some coverage for the car you rented, you should PROBABLY buy what the rental car companies call Collision Damage Waiver.  Collision Damage Waiver will do what the name says – waive your responsibility for damage to the rental car.

If you do not have comprehensive and collision coverage on your own car or are renting a car outside of the USA, you should DEFINITELY buy coverage from the rental car company.

And if you don’t want to “Do as I say” and instead “Do as I do” the answer is NOT THIS TIME.  Because when I rented the car I  declined the insurance.  I decided to rely on my own insurance coverage and hoped that nothing happened to my rental car.

On this particular occasion, I saved some money and nothing happened.  Who knows what will happen next time?