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Do I Really Need to Buy Car Rental Insurance Coverage?

  • Tabitha Naylor
  • July 9, 2013 9:00 AM


Here you are, trying to get out of the airport quickly; you rush up to the car rental desk to pick up the car you’ve reserved… You tell the agent you’re not interested in purchasing the car insurance option, secure in the knowledge that your current insurance offers you the coverage you need. You sign the digital contract based on the verbal agreement you made with the agent, assuming that everything is as you requested it. After all, you are standing there with your suitcases and don’t really have the time to read through the written contract on that small digital screen. The agent gives you the keys, and you are well on your way to enjoying your stay.  But beware! You may have signed up for more than you bargained for.

The Deceptive Car Rental Insurance Agreement

According to the New York Times, certain car-rental agencies seem to be tacking on insurance costs without the knowledge or authorization of the customer. Take the case of Sandra McKinnon, who, when picking up her rental car and informing the agent that she didn’t want the additional insurance, inadvertently signed the “loss damage waiver” option. She incorrectly assumed she was waving her right to this insurance coverage, instead of buying it.

Certainly, Ms. McKinnon was angry to find her car-rental bill was $500 more than what she expected. Most consumer experts would believe this to be a sole customer dispute issue, one Ms. McKinnon need deal with on her own. However, this same story seems to be occurring frequently at car-rental agencies across the country. The problem seems to be that, consumers unwittingly signed for insurance coverage, even though they had verbally declined it.

While the issue seems to be restricted to only a couple of car-rental companies, it is one that all car insurance consumers should be aware of…

If you already pay for comprehensive auto insurance, then you most likely have coverage when renting a car. So purchasing the additional car-rental insurance gives you double coverage, and option you don’t really need, and which could be expensive — often raising your car-rental costs by as much as 50%.

Your Options                                                            

Prevent this from happening to you by planning ahead for any trip you take across the nation. Check your current auto insurance policy to see if you have coverage when driving a car you don’t own. If you do, you can decline the vehicle insurance on a car rental, and this should financially lower your car-rental costs. However, when you only have basic liability insurance or reduced insurance coverage you may not be covered when driving a car other than your own. Given this situation, you obviously want to get car insurance from the car-rental company.

Be Cautious

Make sure you get what you want when renting a car, and aren’t surprised by your final bill. Verbally state that you don’t want the insurance coverage and check the written agreement to make sure it isn’t included. Ask about any inconsistencies in the rental agreement you sign. Remember, the proof is not in the agent–customer verbal agreement, but in that contract on the digital screen, the one you put your written name to. It can often be in your best interest to take the additional few minutes to read the contract. No question is too simple, or to “dumb” when it comes to protecting your money.

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