This article originally appeared on The Zebra.
Recently, my sister needed to rent a car for a weekend beach vacation with a girlfriend. It wasn’t until she stepped up to the counter that she considered the issue of rental car insurance. The rental was just $50, and she didn’t want to pay the $200 extra for insurance if she didn’t need it. But she couldn’t remember when her car insurance policy was up for renewal—living in DC without a car had left her policy far from front-of-mind. When she called and found out it had lapsed, she (reluctantly) forked over the dough. Luckily, her small annoyance didn’t turn into a bigger issue, but it easily could’ve, had she forgotten to check on her car insurance policy.
Too often, we don’t consider rental car insurance at all until we’re standing at the counter. So do yourself a favor right now: Take a few minutes, read this post, and then get in touch with your auto insurance and credit card companies so that you know ahead of time whether or not you need additional coverage at the rental counter. Because who wants to start a vacation with that kind of stress, anyway?
What your car insurance covers
The Short(ish) answer: If you carry both comprehensive and collision coverage on your vehicle, that coverage will also extend to a rental car (so long as you’re not using the car for business, but for recreation.) The Insurance Information Institute offers the following warning in their piece on the topic:
"Check to see whether your insurance company pays for administrative fees, loss of use or towing charges. Some companies may provide an insurance rider to cover some of these costs, which would make it less expensive than purchasing coverage through the rental car company. Keep in mind, however, that in most states diminished value is not covered by insurers."
Also important to note? If you do not carry comp or collision, and instead chose liability-only on your regular vehicle in order to save costs, then your rental car would not be covered under your policy if it was either damaged in an accident or stolen.
The bottom line is, in order to protect yourself from being slapped with administrative and other "outside" fees, your best bet is to call your agent or company rep and see where your auto insurance policy might fall through the cracks. An uber-helpful CreditCards.com piece that’s worth a read offers the following checklist of questions to be sure to ask your agent before you ever step up to the counter:
Do I have collision coverage? (If you have an older vehicle and dropped that coverage, you won’t have it on your rental.)
Does my policy extend to rental cars? (Most do.)
Am I covered outside the United States? Are any countries excluded?
Is there a limit on how long I can rent the car?
Are there any vehicle exclusions?
Does my policy cover loss-of-use and other fees charged by the rental car company?
How much liability coverage do I have?
Once you have the answers to those questions, you can rest easy that you won’t get stuck in loophole land.
What your credit card covers
That same piece also offers the following advice on relying on the credit card you rent the car with to protect you in the event of an accident: Not so fast. Writer Michelle Crouch explains: "Rental car companies are continuing to tack extra fees onto the damages you owe if you have a wreck, industry observers say. Often, those charges aren’t covered by your personal auto insurance or your credit card."
One of the most sneaky of these charges is something called a "loss of use fee," which is a fee meant to cover the cost the company is losing while the vehicle is not in use because it’s undergoing repairs. Also, once you have the car, be extremeley careful not to let anyone who isn’t listed as a driver behind the wheel, speed, or (we know you would never because you’re not a jerk) drive intoxicated. All those those things can invalidate your insurance, leaving you in a potentially huge lurch. Writer Michelle Crouch advises: "Use a card that offers primary coverage if you have it, and ask your issuer how it handles loss-of-use, administrative and diminution-in-value fees."
Small Fees Can Add Up
If you have comprehensive and collision insurance, plus coverage from the credit card you’re renting the vehicle with, chances are you won’t be on the hook for major damages. But smaller administrative fees can still amount to big pains in your side. A bit more bad news, from the III: "Some rental car companies now investigate your driving record and/or credit history so check with the rental car company before picking up the car."
Unfortunately, there’s no one-size-fits-all or click-this-button-and-tell-me-yes-or-no answer to this question, which honestly frustrates me, even as I’m writing this. But keep in mind, like all insurance, rental car insurance is all about how much risk you’re willing to take on. Learn more about the different types of rental car insurance available at the counter here.