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Do You Need Car Rental Insurance? Not Exactly
Published Date : August 2, 2017
You catch your flight, arrive at your destination, get to the car rental counter — eager to get a vehicle and get on with your vacation — and then, you get asked the dreaded question: “Do you want insurance coverage on your rental vehicle?” What to do? You know you have regular car insurance on your vehicle back home, but you wonder if that applies here? And even if it does, is it sufficient? Or should you nonetheless get one-time coverage for this occasion? With summer travel plans in full swing, this common dilemma is sure to occur, especially for the infrequent traveler.
Domestically, most carriers allow the full transfer of one’s regular auto insurance to cover a rented vehicle, too (unless it’s used for business or commercial purposes). Generally-speaking, this should be sufficient if such normal coverage is adequate. Besides, if one’s regular auto insurance is lacking, then that is the place to make improvement and not just when renting. International travel is different, and typically one’s auto insurance does not cover overseas rentals. Of course, if someone has no auto insurance to begin with — a city dweller who relies on taxis or other transportation — then this too would obviously influence decisions.
There are four main types of car rental insurance coverages to consider. Loss/collision damage waiver — which is usually the focus of scrutiny. This involves coverage for accidents while driving and comprehensive for damage done by non-driving things like fire, theft or vandalism. Liability — which is required by state law on one’s regular auto insurance, while many people also carry additional “umbrella” coverage that further reduces the need for this type of rental coverage. Personal accident (for medical costs) — and usually normal health insurance can suffice here, plus any additional similar provisions on one’s regular auto policy. And finally, personal effects to cover items that are stolen from the vehicle — and most homeowner’s (or renter’s) policies provide for this kind of protection that goes wherever you go.
Many credit card companies also provide some degree of extra one-time rental insurance if the card is used to pay the bill. This coverage, though, is for damage and not personal liability. Indeed, the whole matter of personal liability is probably the most important overall risk management consideration regarding vehicles, and getting this proactively right is important – both with one’s auto policy and any supplemental coverage. Additionally, people with older cars often let their collision/comprehensive coverage lapse because it’s hard to justify such premiums on depreciated vehicles, and this type of coverage may be missing at the time of renting.
It could still make sense to elect the loss damage waiver just for hassle factor reasons and to avoid any headaches when returning the vehicle – perhaps damage from skidding on ice during a winter ski trip, or a heavy coconut dropping on the hood during summertime. Should events like those occur, you simply hand back the keys and walk away. And, this waiver usually covers loss-of-use charges while the damaged vehicle is being repaired. Like so many things in life, though, the bold print giveth and the fine print taketh away! Each person’s situation is unique and requires careful individual inspection. Similarly, this short article is but a brief general summary of a topic worthy of further analysis with your financial advisor. Happy trails to you!
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Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
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All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.
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