Do I need to pay for insurance on my rental car?

June 1, 2017 11:47 AM

We're carless, and I'm not sure if I need to pay for the rental car company's insurance when we rent a car or not.

My wife and I do not own a car, and thus do not have car insurance of our own. We're renting a car this weekend, from Enterprise if it matters, and all the information I can see from both Enterprise and our credit card (B of A Alaska Airlines Visa) makes mention of the fact that credit card insurance plays a secondary role to one's existing auto insurance.

But what if we don't have auto insurance? Does the CC insurance cover everything we'll need, or should we pay for insurance through Enterprise? Looking at Visa's benefit explanation, it seems to be the same(ish) as a rental car CDW, but I've never rented a car without insurance of our own before so these are kinda uncharted waters.

posted by pdb to Travel & Transportation (17 answers total)

My understanding is that very few credit cards offer full coverage of rental cars. It may be a premium card feature. You do need insurance when you rent a car. If your CC doesn't cover it, or covers it incompletely, then you need insurance from the rental car agency. This can easily double the cost of renting the car, in my experience. Your next step is probably to speak with your credit card and find out exactly what they do cover in regards to a rental car.
posted by Cranialtorque at 11:56 AM on June 1, 2017 [3 favorites]

Best answer: My understanding is that, if it's your fault, the credit card covers collision damage to the rental car. It does not provide liability protection. So if you crash into somebody else, you will still be liable for damage to them, their car, and any surrounding property. If someone crashes into you, their insurance should cover everything, but they may be uninsured. So you'll want to buy at minimum liability protection and uninsured/underinsured motorist protection.
posted by everythings_interrelated at 11:58 AM on June 1, 2017 [5 favorites]

If you plan to rent frequently, consider non-owner liability insurance. Only a few companies sell it, and I found Geico to be by far the least expensive.
posted by Mr.Know-it-some at 12:06 PM on June 1, 2017 [3 favorites]

Your nice card will provide collision/comprehensive insurance.

Most (all) states have liability insurance included in rental, but the coverage is week, like 10-20k. Supplemental Liability is worth the peace of find.
posted by sandmanwv at 12:07 PM on June 1, 2017 [1 favorite]

I don't own a car, and used to rent from Enterprise frequently, a few years ago. They always offered: Liability, Collision, and Medical. I always got liability and collision, and declined medical, since I have health insurance. I didn't have a credit card at the time that covered collision, but yours might. You have to find out the terms. I suspect you'll at least need liability.
posted by quarterinmyshoe at 12:16 PM on June 1, 2017

Best answer: Even IF your CC offers full coverage, it would be highly unlikely that it will cover the rental company's 'out of service' fees. Hubs and I got snagged with $1k+ of out of service fees that neither our regular auto insurance nor our CC would cover. So now we ALWAYS take the rental insurance. Always.
posted by PorcineWithMe at 12:42 PM on June 1, 2017 [1 favorite]

Best answer: Seconding non-owner liability insurance. Can be expensive, but the peace of mind (and declining extra coverage from Enterprise) was worth it for us in the long run with frequent car-share use.
posted by supercres at 12:58 PM on June 1, 2017

I just wanted to pipe up and address the liability issue. Your credit card usually provides you with free collision insurance, as noted above, but you should always download the most updated document proving it for safe measure. You should also check the laws in your state regarding liability, and other insurance. Some state Attorneys General provide guidance on this issue — as part of a measure to prevent fraud. In the case of New York, for example, the Attorney General notes that extra liability from the rental agency is not necessary.

For many renters who have modest amounts of assets, the minimum coverage the car rental companies must provide as a part of the rental may be enough to protect them from lawsuits by victims of accidents involving the rental car.... SLP [supplemental liability protection, what car rental agencies offer for a fee] usually provides $1 million of liability protection, considerably more coverage than most consumers have under their own automobile insurance policies.

Here's the entire link to that Attorney General page in New York: Car Rental Tip Sheet
posted by Violet Blue at 1:20 PM on June 1, 2017

Also remember that credit card collision insurance is a) only on the vehicle you rent and only up to a certain amount on a standard car (so no rental trucks or exotics) and b) is secondary to any other insurance you may have, so if you do have private coverage on your own car (and rental coverage under that, know your policy because while it's common it's not universal) it's going to have to pay first. Amex sells a premium policy that costs $20-25 per rental (depending on coverage package) if charged on your Amex card, free to sign up, that has higher limits and is a primary payer rather than secondary. But if you rent more than 20 days a year you are best advised to carry extra rental coverage on your private car insurance or buy a non-owner liability policy (I had one from State Farm for a while that was like $250 a year for very good coverage, but I do have a clean record and am old enough to be cheap to insure). Car sharing services will also write you additional coverage as part of your annual user agreement for a fee.

Many people do not carry nearly enough insurance on their own cars and have no idea how much risk they take when they decline coverage at a rental counter thinking their credit card "covers" them. Or that the rental car company's bare minimum liability is sufficient.

Bare minimum liability is NEVER sufficient, especially if you have ANY assets to protect from lawsuits. The average middle class driver who owns a home and has savings of any size should be carrying at least half a million dollars in liability insurance. Cars are relatively cheap even when they're expensive (hit just the right Mercedes or Porsche just right and you could be out a nice house though). Bodies are very expensive to fix. As in hundreds of thousands for the sorts of injuries sustained in a serious car wreck. I think it's smart to carry at least half a million in liability, injury, property damage, and uninsured motorist coverage, and then if you have serious assets (let's say of a million or more) to buy a personal liability policy (extends beyond car) for about the amount of your net worth. It's surprisingly affordable given the peace of mind it buys, and assuming you're a low risk person.

Most employed people could manage being out $30k somehow. Being sued for half a million bucks because you broke someone's pelvis and took out their Range Rover in the process, and assumed the rental agency's liabiiity coverage would be enough, is bankruptcy and lose-your-life-savings territory for most people.

By the way the supplemental liability policies most rental agencies sell your for $20 a day are STILL insufficient for a middle class person with assets. Get your own, know your agent, and cover your ass. Driving is the riskiest thing most of us do every day. By far. But we tend to forget how financially exposed it can make us. Insurance is expensive. Not having (enough of) it can be much more expensive. Most people do not carry enough.
posted by spitbull at 1:46 PM on June 1, 2017 [2 favorites]

Response by poster: spitbull: the point of my question is that I don't own a car, so I have no car insurance of my own. Trying to figure out the best plan for coverage when I do rent a car. I get the point of insurance, and fully believe it's necessary - I'm just unsure the best way forward when I rent, given my overall insurance-less status.

Thanks to everyone who suggested non-owner liability; I'll definitely check in to that.
posted by pdb at 1:54 PM on June 1, 2017 [1 favorite]

Understood, I was just generalizing my answer. Point for you is that you should consider your risk in terms of your assets and not legal minimums, and in terms if damage you could do to others rather than to the car you rent. The non-owner policy will likely have some options for higher limits of coverage. I had one from State Farm, as I said, and paid to increase its bodily injury and property liability to half a million, as I recall, which didn't cost me much more than the usual lower limits they write.

Now I think I under-insured myself at the time.

I tend to address car insurance questions exhaustively because I have known people who learned the hard way and man did that suck for them (and scare the shit out of me!). You of course are exactly right to be thinking of this. Future readers may not be as informed.

I own a car now, but at one point I was renting 50-60 days a year. Non-owner policy was totally worth it.
posted by spitbull at 2:03 PM on June 1, 2017 [1 favorite]

The long answer to this question depends on where you live and where you're renting the car. We live in DC, where I got a serious runaround trying to find non-owner liability insurance ("we don't offer that, try Progressive." "I did. They referred me to you.") In most (but not all) states, the rental carrier is legally required to meet the minimum liability coverage (self-linking here on the green, since I did a lot of research for that answer). If you are renting a car in Texas or California (to name two states where I know the rental companies are not required to meet the minimum liability coverage) you'll be required to purchase liability insurance if you don't have it. In other states the rental car company will meet its legal obligation, and it's up to you whether you're comfortable with that minimum or you want more liability coverage.
posted by fedward at 2:05 PM on June 1, 2017 [2 favorites]

I got the "what's that now?" runaround (Geico, Allstate, Progressive all shrugged) on non-owner coverage in NYC as well, a few years ago. That's how I ended up with State Farm, who knew exactly what I wanted and could write a more robust policy. (Have since left them for Travelers however.)

You're better off asking an independent agent about a non-owner policy than doing the web quote thing, I found.
posted by spitbull at 2:16 PM on June 1, 2017 [1 favorite]

By the way, ZIP Cars do come with insurance. When my son was in your situation, he found that zip cars turned out to be more affordable for that reason than a regular rental car.
posted by metahawk at 4:21 PM on June 1, 2017

And to add my usual caveat: if you on a home or have savings, Zipcars do not "come with" nearly enough insurance.
posted by spitbull at 7:25 AM on June 2, 2017

As to the above, Zipcar's also have an additional monthly opt-in for full coverage if you ever do go that route.

Check your credit card for the insurance coverage but unless it's a travel card with full insurance coverage (excepting exotics and trucks) it's probably not enough.

There are cards out there with comprehensive coverage, but they are premium cards with fairly hefty annual fees. Having said that, as a frequent renter I've found that it only takes about 5-10 rental days a year to make back the fee through insurance savings so if you think you'll be renting regularly it's worth it.

Also - I've had to make 2 claims through credit card car insurance and while in one case there were some upfront costs, I got all the money back. The paper work is a pain, but again, if you're renting often it's worth it for the savings.
posted by scrute at 5:32 PM on June 2, 2017

As someone who ended up on the hook for $3000 in damages when there were three insurance companies in play, I tend to be conservative now, and advise others to do the same.
posted by Nothing at 2:02 PM on June 3, 2017