Car Rental Insurance: To Pay or Not To Pay?

Isn’t car rental insurance grossly overpriced, and can’t money be saved by booking with a credit card that provides insurance on vehicles rented with that card?

Yes and yes.

Sort of.

Car rental companies do make substantial profits by charging elevated rates for insurance, and it is possible to waive the insurance coverage when picking up your car (though some companies have stopped this practice), but I only recommend doing it in certain circumstances.

Vehicles rented in the United States should fall under your personal insurance policy.  Check with your insurance carrier before booking, and if you’re covered, then by all means decline the insurance offered by the rental car firm.  If you don’t you’ll simply be wasting money on useless coverage.

Many credit cards also offer primary insurance (if the card is used to book the vehicle) on cars rented in the United States.  Call your card company for details.

The rules change when you go to Europe.

Your regular insurance will not cover you outside the United States so do not waive the CDW (collision damage waiver) if you have no other form of insurance.

Many credit cards offer only secondary insurance (covering what’s left after you submit a claim to the primary coverage holder), though some are now offering primary coverage for an extra fee (American Express).

offers all of its card holders primary coverage but you absolutely must read the fine print. Personal damage, personal liability, and damage to other vehicles or property (among other things) are not covered.

So, let’s imagine for a moment that you have an accident somewhere in the French countryside.  You waived your coverage and relied on your card company to provide insurance.

Do you need a tow truck?
Do you speak French well enough to explain to the policeman what happened?
Was the accident your fault?
Was the other driver injured?

I can assure you that your credit card company in the states will be unable to provide any immediate assistance at all and the likely hassle of submitting a claim will be difficult.  On the other hand, if you have coverage with your car rental company you simply make a phone call, they bring you another car, and you drive away.

My advice: Buy the insurance.

4 responses

  1. This is excellent advice. I was in the car with someone who had a minor accident in France. The owner of the other car sought to take advantage of the accident for personal gain. The incident could have caused my friend a great deal of trouble had he not had the auto agency’s insurance. His vacation would have been interrupted and much time lost in dealing with endless red tape. Fortunately, he had not opted out of the leasing agency’s insurance plan, and was able to continue his vacation without delay. There was, however, a simple form the driver of each car was expected to fill out and sign. When picking up a car in another country, travelers might want to ask exactly what the procedure is in the event of an accident.

    • Hi and thanks for your comment. The best price really depends on a lot of different factors when renting a car. One day Hertz may have the best price and the next day Avis. I have found, though, that going to the Hertz or Avis websites to book usually does not result in the cheapest price. I usually have the best luck with rental car consolidators such as Easycar, Sixti, and even Europecar.
      Good luck!

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