How do I protect myself and my wallet when renting a car?
March 11, 2012 10:53 AM   Subscribe

How much insurance coverage does a person without a car (or their own insurance) need when renting a car in the U.S.?

As a city dweller I don't own a car and only drive every few months—either borrowing my mom's car or driving a shared car (iGo/Zipcar). Sometimes I consider renting a traditional rental car if I'm going to be driving longer distances or needing a car for a few days to a week because car share prices only make sense for a few hours of rental. Buying the rental company's insurance usually more than doubles the price of the rental and I'm wondering how much insurance I need?

My Capital One Visa does cover the rental car itself but it doesn't cover liability or injuries. In a worse case scenario I assume that's where the real money would come into play. Do I need to decline collisions from the rental company but get some other liability insurance? What do people with no car insurance do? I see other askme's mentioning mandatory state coverage. It appears that in Illinois liability insurance is required; liability minimums 20/40/15, uninsured motorist coverage required, but I don't understand what that means for me. My card's fine print is in this PDF but here's some of the relevant details:

Covered losses are:
Physical damage and/or theft of the covered rental vehicle.

Valid loss-of-use charges imposed and substantiated by the auto rental company through a fleet utilization log.

Reasonable and customary towing charges, due to a covered loss, to the nearest qualified repair facility.

For the benefit to be in effect, you must:
Initiate and complete the entire rental transaction with your eligible Visa Signature card, and

Decline the auto rental company’s collision damage waiver (CDW/LDW) option, or similar provision, if offered.

Review the auto rental agreement carefully to make sure you are declining CDW/LDW and also to familiarize yourself with the terms and conditions of the auto rental agreement.

What is not covered?
Any obligation you assume under any agreement (other than the deductible under your personal auto policy).

Any violation of the auto rental agreement or this benefit.

Injury of anyone or damage to anything inside or outside the rental vehicle.

Personal liability.

Expenses assumed, waived, or paid by the rental agency or its insurer.

Cost of any insurance or collision damage waiver offered by or purchased through the auto rental company.

Depreciation of the rental vehicle caused by loss or damage including, but not limited to “diminished value.”

Expenses reimbursable by your insurer, employer, or employer’s insurance.

Wear and tear, gradual deterioration, or mechanical breakdown.

Loss or damage as a result of the cardholder’s lack of reasonable care in protecting the rental vehicle before and after

Losses reported more than forty-five (45) days5 from the date of loss.

Losses for which a claim form has not been received within ninety (90) days5 from the date of loss.

Losses for which all required documentation has not been received within 365 days from the date of loss.
posted by Bunglegirl to Travel & Transportation (5 answers total) 5 users marked this as a favorite
Is it possible for you to get on the policy for your mom's car, as a regular driver of the car? YMMV about whether this will increase her costs, but maybe not. I was on my husband's car insurance like this for the several years I didn't own a car, and it made no difference to the policy price. We had the same address though, for insurance purposes, so I don't know if that will work for you.
posted by Tandem Affinity at 11:15 AM on March 11, 2012

I had a policy with USAA for a while that was designed for people who didn't own a car but occasionally rented them. Check with your insurance provider to see if they offer anything similar.
posted by devinemissk at 11:51 AM on March 11, 2012 [1 favorite]

I use American Express' premium car rental protection occasionally in combination with the liability insurance supplement offered by the rental company. The combo provides some medical and death benefits for the renter and passengers and $1M in liability coverage. I say "occasionally" because I don't have any assets, so I only get the liability supplement if I happen to have the extra money at the time.
posted by melissasaurus at 12:01 PM on March 11, 2012 [1 favorite]

If you drive as infrequently as you say, just take the rental company's insurance. If you go "deep" on coverages, basically you have to pay for nothing in the event of an accident. Even if an accident is NOT your fault, rental companies can basically ruin your life and your credit, even if you have decent personal insurance.

Seriously, it's worth the extra ~$20 a day. Also, rent the car on priceline, offer at least 40% under what the going rate is, and you'll almost certainly get it approved.

If you're really worried, pick up a personal umbrella policy in addition to the rental coverage and call it Yahtzee.
posted by TomMelee at 8:58 AM on March 12, 2012 [1 favorite]

Response by poster: I checked with my mom and I'm not on her policy. My rental insurance agency says there is a liability plan but it's so expensive that it wouldn't make sense and I would be better off getting the rental insurance option. Thanks everyone!
posted by Bunglegirl at 11:39 AM on March 13, 2012

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