As the holiday season kicks into high gear, millions of Americans will hit the road to visit family, take long-overdue vacations, or simply get away for a few days. For many, this means renting a car, but one question inevitably arises when you reach the counter: Should I get rental car insurance?
While the answer depends on your unique circumstances, understanding rental car insurance and its benefits can help you make an informed decision—potentially saving you from financial headaches during the busiest travel season of the year.
The Holiday Travel Surge
Thanksgiving and the December holidays are some of the most heavily traveled times of the year. According to AAA, over 55 million Americans travel for Thanksgiving alone. The combination of increased traffic, winter weather conditions, and longer-than-usual road trips can lead to higher risks of accidents or vehicle damage.
This heightened risk makes rental car insurance a worthy consideration for many drivers. Whether you’re navigating unfamiliar streets in a new city or driving through snowy mountain passes, having adequate insurance coverage can provide invaluable peace of mind.
What Is Rental Car Insurance?
Rental car insurance is a collection of optional protections offered by rental car companies. It typically includes:
- Collision Damage Waiver (CDW): Covers repair or replacement costs for the rental vehicle if it’s damaged or stolen.
- Supplemental Liability Insurance (SLI): Provides additional liability coverage if you cause an accident and are held responsible for injuries or property damage to others.
- Personal Accident Insurance: Covers medical expenses for you and your passengers in the event of an accident.
- Personal Effects Coverage: Protects personal belongings in the rental car if they’re lost, stolen, or damaged.
Do You Really Need Rental Car Insurance?
In many cases, you may already have sufficient coverage through your personal auto insurance, credit card benefits, or travel insurance. But there are situations where rental car insurance may still be beneficial—or even necessary.
1. Personal Auto Insurance
Most personal car insurance policies extend coverage to rental vehicles. This means your policy’s liability, collision, and comprehensive coverage could apply if you’re in an accident or if the car is damaged. However, personal insurance often doesn’t cover “loss of use” fees charged by rental companies when the car is out of service for repairs.
2. Credit Card Benefits
Many credit cards include rental car coverage as a perk. Typically, this coverage is secondary, meaning it kicks in after your personal auto insurance. However, some premium cards offer primary rental car insurance, covering damage or theft without requiring you to file a claim with your insurer.
Before relying on your credit card, check the terms carefully to confirm the coverage:
- Does it apply in the country you’re visiting?
- Are luxury or specialty vehicles excluded?
- Does it cover loss-of-use fees?
3. Travel Insurance
If you purchase a travel insurance plan, it may include rental car protection. However, like credit card benefits, this coverage often comes with limitations, so reviewing the fine print is essential.
When Should You Purchase Rental Car Insurance?
There are specific situations where opting for the rental car company’s insurance makes sense:
You Don’t Have Personal Auto Insurance
If you don’t own a car, you likely don’t have an auto insurance policy. In this case, rental car insurance is essential to protect yourself financially in case of an accident or damage to the vehicle.
Traveling Abroad
Most personal auto insurance policies and credit card benefits don’t extend coverage internationally. For trips outside the U.S., purchasing rental car insurance is often the safest option.
Your Personal Policy Has Gaps
Even if you have car insurance, your policy may not cover everything. For example:
- High deductibles could make repairs costly.
- Comprehensive and collision coverage might not be included in your plan.
- Personal policies often exclude vehicles like trucks or luxury cars.
You Want Peace of Mind
The holidays can be stressful enough without worrying about potential out-of-pocket expenses. If you’re unsure about your existing coverage, purchasing rental car insurance can provide added reassurance.
Why Is Rental Car Insurance Important During the Holidays?
Holiday travel presents unique challenges that increase the likelihood of accidents and damages:
- Winter Weather Hazards: Snow, ice, and sleet make driving more dangerous, especially if you’re not accustomed to these conditions.
- Crowded Roads: With millions of cars on the road, the risk of fender benders or collisions rises dramatically.
- Unfamiliar Roads: If you’re traveling to a new city or state, navigating unfamiliar streets can be tricky, leading to a higher chance of mishaps.
- Long Distances: Extended road trips increase wear and tear on vehicles and the potential for accidents.
How to Decide If You Need Rental Car Insurance
Here’s a step-by-step guide to help you determine if rental car insurance is right for you:
- Contact Your Auto Insurance Provider: Ask whether your policy covers rental vehicles and clarify any exclusions, such as luxury cars or international travel.
- Check Your Credit Card Benefits: Contact your credit card company to confirm what’s covered. Don’t forget to ask about exclusions, limits, and whether the coverage is primary or secondary.
- Evaluate Your Travel Risks: Are you traveling long distances? Will you encounter challenging weather or unfamiliar terrain? Consider the increased risks of holiday travel.
- Review Rental Car Terms: Rental companies may require proof of existing coverage if you decline their insurance, so have your documents ready.
Final Thoughts
Rental car insurance isn’t always necessary, but during the holidays, it can be a smart investment. The combination of unpredictable travel conditions and increased road traffic means that extra coverage could save you from significant financial and emotional stress.
Whether you rely on your personal auto insurance, credit card benefits, or decide to purchase coverage directly from the rental company, ensuring you’re adequately protected is key to enjoying a worry-free holiday season.
Need Legal Help After an Accident?
If you’re involved in an accident during the holidays in North Carolina, RHD Legal is here to assist. We understand the complexities of rental car claims and insurance disputes. Contact us online or call 919-246-4001 to schedule a consultation. Our team in Raleigh, North Carolina is here to make sure you can focus on what truly matters—enjoying the holidays with your loved ones.
