Should I buy separate insurance when I rent a car?

So you are renting a car and trying to figure out if you should purchase the insurance they offer. It all depends on the type of coverage you have on your current auto policy.

There are many misconceptions about auto rental reimbursement coverage that is provided under your car insurance policy. Rental reimbursement coverage will cover the daily rental fees when your vehicle is not drivable due to a covered claim. With the coming of summer, there are a few other things everyone should know. First and foremost, your rental reimbursement coverage is not for renting a car on vacation OR for when your car has mechanical problems. The coverage is for when there is an auto claim and your car is not drivable.
When you rent a car for a non-claim situation, the other coverage you have on your auto policy transfers to the rental car. If you have full collision insurance coverage on your auto policy, then you will have full coverage for the rental car. If you only have liability insurance coverage on your auto policy, then only liability transfers to the rental car and then you must purchase the coverage through the rental company.

However, there is one coverage that is included in the insurance offered by the rental car companies that is usually not covered by your auto insurance. If you get in an accident while driving a rental car, while that rental car is being repaired the rental car company loses rental income and you will be charged for this loss of income. Your auto policy will not provide any coverage for this loss of income. The full insurance package offered by the rental car company does protect you for this type of loss of income. Depending how long the rental car is down this can be a very costly expense. Also, there is usually no deductible when you buy the insurance through the rental car company. When you use your own policy then the deductible would apply.

Rental reimbursement coverage under your auto insurance is important when you have an accident. Insurance is for protecting you in case of an accident not for the daily rental fees.