New advice on rental car insurance

When you need to pay for coverage and when you can safely say no

Planning a trip that includes a rental car? Finding the right size car is easy, but what about insurance add-ons? Should you buy the added coverage? Or are you already covered with your own policy?

And if you think your credit card will always cover you, think again.

When Andrea Ferrero travels on vacation or for business she frequently rents cars. But she's often confused about whether to add the rental company's insurance to the credit card and personal coverage she already has.

"It's hard to know if you're fully covered and if you have the right coverage," Ferrero said.

Consumer Reports says before you rent a car, check for coverage under your personal auto insurance. And also through the credit card you'll use.

Credit cards can change their terms. For instance, Discover recently stopped offering rental car insurance altogether. American Express, Chase and Citibank still do offer it, but check their terms and limits. If a credit card is your primary coverage, there could be a benefit to using it.

"Should there be a claim, the credit card insurance could be in line to cover it and your own auto insurance rates may not change," said Octavio Blanco, Money Editor for Consumer Reports.

Remember that to be covered through your credit card you need to pay for the entire rental with that card and decline the rental agency's coverage.

"However, if you are going to depend on your own auto insurance policy, remember the rental will be covered under the same terms as your own car," Blanco said. "So check those terms carefully."

For instance, if your personal policy doesn't have collision coverage, you should consider adding the rental car company's. But that can run as much as $30 a day. Liability can run $10 to $15 a day.

In the end, Ferrero said peace of mind is worth doing the research and paying for additional coverage if it's needed just to be safe.

If you are traveling outside the U.S., it's very possible your personal insurance won't cover a rental car.

In that case, your best option may be to get the rental company's insurance. Read the terms carefully and make sure it will cover your anticipated itinerary and activities.


Recommended Videos