Rental car- insurance?

Is buying the extra insurance on a rental car a good idea? I assume that my own car insurance would cover me if I declined, right? If I buy the extra insurance from the rental company, and the wreck the car, will that keep me from having a claim against me on my regular insurance and keep my premiums from going up?

On a more general note, when I buy insurance for my car, am I insured, or is the car insured? So if I loan the car to a friend and they wreck it, does my insurance or their insurance pay? And if I borrow a friend’s car and wreck it, does my insurance or theirs pay?

You should really ask your insurance agent these questions, as insurance coverage varies.

Al lthis depends on the state & country you’re in, as well as the specific policy you buy.

In general the rental insurance is very expensive for what you get. If you already have your own coverage, then the smart financial decision is to decline the rental coverage. But that assumes you do indeed have coverage already.

Your rates can/will go up if you get a citation connected to damaging a rental car, even if you never claim against your own insurance. Will they go up even more if you do claim against your company? Probably, but there’s no way to predict how much, and I’d be very surprised if any insurance company would/could tell you in advance how they’d reprice you after some hypothetical accident.

And check the credit card you use to pay. My CC offers further protection as well. But there are too many variables with your own car insurance, your CC, and the agreement with the car rental company to give a single answer.

My son is a manager for a rental car company. When he got this job, and started telling me about all what he deals with on a daily basis I went :eek:. You would be amazed at the number of people that wreck their car, rent a car during the repair, and proceed to wreck that one in just a day or two. So if you are not the most confident driver out there, or have trouble adapting to a new car, buy the insurance. Otherwise you regular car insurance should cover you, but ask your agent to be sure.
Funny story from the rental car trenches. Lady wrecks her car, comes to rent a replacement while her’s is fixed. She accepts the insurance coverage on the rental. The very next day she damn near totals the rental. No problem, fill out accident report, here is another car. The very same day my son gets a phone call from her son It went something like this:
Customer’s son: You ripped my mother off
My son: :confused: What do you mean?
Customer’s son: You charged her for rental insurance
My son: She accepted the coverage, and so yes I charged her for it.
Customer’s son: That is a ripoff, I want that charge off of there.
My son: Sir you do realize that your mother severely damaged our car, and without the insurance would have to pay the deductible, right?
Customer’s son: I don’t care, I want that charge off of her contract
My son: Fine you bring me a check for the $2500 deductible, and I will be happy to give you a check for $12
Customer’s son: :smack:
If you don’t have the insurance, and wreck the car, the rental company is going to want your deductible right now. If and when they recover the money from a third party, you will get the deductible back.

In general (and I do mean in general) if both you and your friend have family auto policies, the insurance follows the car. However in lieu of coverage on the car, the driver’s policy will step up and pay. I would like to note that not all companies issue family auto policies, and you have to either read your policy, or talk to your agent to be sure. Some companies almost never issue them (Mercury)

Rick’s answer was partially correct.

You buy auto insurance to cover the vehicle you own or lease. Your policy is specific to your vehicle, which means that it’ll cover the claim if your friend wrecks your car, and conversely, your friend’s policy will cover the claim if you wreck his car. That being said, the insurance company may decide to pursue the driver, or his liability insurance, if he has any, to recover the money it paid out.

I personally will not lend my car out to anyone to whom I am not related by blood or marriage, and even then there would have to be extenuating circumstances. That’s what rental vehicles are for; they may cost money, but the stress they save may be your own.


I wasn’t sure about if the company covering the car would subrogate or not, so I left that out. I expect they would, but it has been way to long since I held an agent’s license.

One of the more interesting “revenue enhancement” tactics being used by some rental companies is to also charge for the loss of use of their vehicle while it is being repaired. Needless to say, most people’s insurance don’t cover this.

There’s no substitute for being informed as to what your own or the CC insurance actually covers.

You should consider the general guiding principle of all kinds of insurance, to wit: Buying insurance is paying somebody else to handle risk. It should never be a good deal on a statistical basis, because it has to be a better deal for the seller of insurance - that is how they make a profit. Your option is to trade away the statistical advantage in order to purchase the risk management, on the basis that the risk is harder on you than the insurance. For instance, most of us would be devastated by the loss of our $200,000 house, or a $50,000 surgery, or a $1000000 judgement against us in an automobile accident. We would rather pay some predictable amount much smaller than this to get the insurance. It is not devastating to an insurance company to pay out these things, and they are in a position to study the statistics and offer a profitable but useful policy to us.

I think if the cost of something would be devastating, you should consider insuring against it, but if it would not be, you should “self insure”.

I rented a car once, and they said I had to buy their insurance unless I had full (i.e. comprehensive and collision) insurance on my car. At the time I only had liability on my old truck, so I went home, got online and increased my insurance, and went back to the rental place. Increasing my insurance for a month was cheaper than buying their insurance for a week.

As already said, you gotta talk to your insurance company about these questions because different companies do it differently, and different states require different things. There’s just no way to answer your question without knowing where you are, who your insurer is and what your coverages are. And even then you’ll only be 90% certain that you’re getting the right answer. And 90% certain means “I don’t know.”