Rental car insurance is downright expensive ($10 to $30 a day), but I understand why people buy it. Your rental agreement makes you responsible not just for damage to the vehicle, but also for loss of use. This means that on top of the repair bill, you will be charged each day the car is out of service. In general, the auto insurance coverage you have will follow you when you are driving a rental car (be sure and check that this is the case with your insurance company). Your auto insurance will not likely pay for 'loss of use' so you could still be facing a sizable out of pocket liability. In my own case, I have one additional issue - I do not carry collision or comprehensive insurance on my cars because they are paid off and a few years old. As a result, when I rent a car I would not automatically have this coverage (since I don't have it on my own auto policy).
1. Change Your Auto Insurance Coverage A Few Days Before Your Trip
I actually learned this trick from my own auto insurance company that advised me to call them a few days before a trip and add back the collision and comprehensive coverage and remove it when I get home. The cost for a few days of this extra coverage on my auto policy is nominal. I was also advised that I only need to do this for one of my vehicles and this would allow that coverage to follow me (check with your own provider as policies vary).
2. Pay For Your Rental With A Credit Card That Provides Free Insurance
There are hundreds of options on this, and you might already have a credit card in your wallet that provides this coverage. The key, however, is to get the details. You will find that most cards offering this benefit will provide secondary coverage. This means that they will pay what your auto insurance does not pay. An even better arrangement is to get a credit card that provides primary coverage (this means that they pay most of the bill and if there is anything left your auto insurance picks up). Secondary coverage is better than nothing, but primary coverage is a superior option. Primary coverage provides a largely hassle free experience (unlike dealing with a traditional auto insurance claim which might involve a substantial investment of time).
The Following Credit Cards Provide Primary Insurance On A Rental Car
- Chase Sapphire Preferred and Sapphire Reserve Cards
- United MileagePlus Explorer and MileagePlus Club Cards
- Ritz-Carlton Visa Infinite Card
- J.P. Morgan Reserve Card
Having full coverage in generous amounts makes sense no matter where you are driving a rental car. I will tell you, however, that when my itinerary includes a major city like Chicago, New York, or Los Angeles, I will double down to make sure I have an abundance of coverage. Another scenario is renting a car internationally - most people do not know that their auto insurance will not follow them when driving a rental outside of the United States. When I was in Italy in 2016 I rented a car and made plans in advance to include full auto coverage with the travel policy I had bought. This was much less expensive (about a third) of what it would have cost to buy the insurance at the rental agency in Milan. The strategy of paying with a credit card that has built-in insurance can still work internationally. The Chase Sapphire card provides coverage internationally and has no country restrictions.