Do You Need that Rental Car Coverage?

courtesy of MetLife Auto & Home

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There's a lot to consider when planning for any trip, and obtaining insurance for a rental vehicle is probably not top of mind for most consumers. However, many become fully aware when they discover that in some instances, rental insurance can cost as much as actually renting the vehicle. But is that rental car coverage really a necessity?

"Many times, purchasing full rental insurance is unnecessary," says Cathy Lewis, MetLife Auto & Home's National Rental Coordinator. "A rental vehicle used on vacation qualifies as a 'non-owned automobile' under most personal auto policies, meaning that your vehicle's coverage carries over to any vehicle that you rent."

If the auto policy doesn't provide coverage, a credit card might. Most credit card companies commonly provide insurance protection for rental cars, if the full amount of the rental is charged to the card. This is generally called "secondary" insurance, because it will only pay when one's personal auto policy does not. Consumers should always check with their creditors to understand the services provided and the coverage limitations.

Either way, there are times when additional insurance coverage may come in handy. The key is to consider how the level of protection "stacks up" against the protection the rental car company is offering. When making the decision to purchase rental insurance, it's important to ask:

  • Do I need collision damage waivers? With a collision damage waiver, the rental company agrees not to hold the renter responsible for accidental damage or loss, as long as the conditions of the contract aren't violated. If it's determined that any damage would be covered under an insurance policy or credit card, it's safe to waive the waiver. In addition, in some states, "partial collision damage waivers" are offered, which will cover the cost of any deductible that the automobile policy contains.
  • Is additional liability coverage necessary? Rental companies offer the option of purchasing liability insurance, although personal auto policies already provide liability insurance in the event someone is injured in an accident.
  • Is more coverage necessary? It depends on one's level of comfort, but keep in mind that if the state where the accident occurs requires higher minimum limits than what one's personal policy affords, auto insurers are legally required to provide that state's minimum level of coverage.
  • Does my personal auto policy provide complete coverage if I have an accident in a rental car? If the vehicle needs repair work, a personal insurance policy may not pay for rental agency expenses, such as loss of rental income while the auto is out of service, or other "incidental" items such as towing, storage, and administrative costs that the rental company may incur.

In all cases, the best bet for consumers is to place a quick call to his or her insurance carrier or local agent before leaving on vacation. "Your local insurance expert can probably tell you in five minutes all you need to know about your rental insurance needs for any given trip," said Lewis. "That quick call could save you some grief later on down the road."

MetLife Auto & Home, a subsidiary of MetLife, Inc. (NYSE: MET), is one of the nation's leading personal lines property and casualty insurance companies, insuring over 3.8 million autos and homes.

MetLife Auto & Home has developed Identity Theft resolution services to both its auto and home insurance customers, offered at no additional charge. For more information about MetLife and its affiliates, visit

Take the Next Step

  • Get out your auto insurance policy and call your insurance company to see if you are covered while driving a 'non-owned automobile'.
  • Check with your credit card companies and see if you have "secondary" insurance.

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