Do You Really Require Car Rental Insurance?

I had an interesting thought while up here in Portland. Do I need to pay for car insurance?

At the Avis counter at the Portland Airport, the rental agent was upselling me on CDW. It got me thinking, “Do I really need rental insurance?” I had to research this further…

This may not be known to many people who travel frequently, that they have a few other options.

Buying CDW may make sense for you, or it may not. But the time to shop for it is long before you arrive at the counter.

Most drivers are adequately covered for the average rental (assuming it’s for leisure and not a business trip). To assess your own status, here’s a rundown of the steps you should take:

Check your personal auto policy.

If you own a car, look at your automobile insurance policy. The same coverage and deductibles you carry on your car will apply — in many cases — to a vehicle you rent. But be careful: If your policy provides less coverage than the value of the rental (your ‘88 Pontiac), you may need to calculate the value of the loss of a brand-new vehicle and decide if you need to supplement it. For example, many owners of older cars don’t always carry comprehensive coverage for accidents, fire and theft.

Check your coverage by your charge card company.

This can be tricky because not only does coverage vary from card to card, but it can widely vary based on the bank or credit company that issued the card as well. And it’s very important that you inquire about exclusions because some exotic or expensive vehicles — such as sports cars, SUVs, motor homes and motorcycles — may not be covered. Vehicles rented outside the U.S. may not be covered.

I book all my flights, rentals and accommodations on my American Express card (non-business account), which if I read the conditions correctly, covers me with certain automobile insurance benefits, and other travel coverages.

Do you want to chance it?

I’ve been renting cars since I was 21, and I’ve never been in an accident. I’m really confident in my driving abilities, because I anticipate and response accordingly to drivers on the roads. I usually chance it without car rental insurance. Having said that, I do attribute some degree of bad luck when getting in an accident, and if that happens, I should be covered by my auto policy and American Express card.

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