UPDATED: Mar 13, 2020
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Rental automobile insurance is available (but optional) for serious accidents in which your main vehicle becomes seriously damaged. Most people can’t go a single day without having a vehicle to commute themselves and their family to/from work, school, daycare, recreational activities, and more. And the longer your vehicle is out of commission post-accident, the more expensive it will become to rent a replacement vehicle while you wait for yours to be repaired or replaced. It might not cost that much if you can get your vehicle back quickly; however, if it takes weeks or more to repair or replace it, rental costs can get prohibitively expensive. And that’s where rental insurance can help you save money.
Rental Automobile Insurance Coverage – Decline or Accept It?
Your auto insurance can assist you in this department. Automobile rental insurance coverage is specifically designed to aid in the payment of rental expenses you might incur after an accident. Not all rental insurance coverage is created equal, however. Some are fast and loose with their rules and restrictions – they may even give you the freedom to choose your own car from whichever rental agency you want. Others are more particular, and limit who you can rent from as well as what type of vehicle you are allowed to rent. Still others will make you pay upfront and reimburse you for rental expenses later, while others will pay your costs for you.
There are also limits on how much your insurance provider will pay for a rental vehicle. Sometimes they limit payments to a daily maximum, or just name a single lump sum maximum for a specific accident. And if you exceed either of those limits, you will end up paying out-of-pocket for your rental.
Rental Automobile Insurance Costs and Benefits
So, what are the costs associated with this kind of coverage? This will differ from policy to policy, so be sure to review yours in detail. On average, this kind of insurance will cost around $40.00 annually for each car insured under the policy (an average of $3.34/mo). If you can find a rental car that costs $30.00 daily, and if your car won’t be ready for 5 days, you end up saving $90 total thanks to your rental insurance coverage.
But rental insurance coverage isn’t necessary for everyone. If you work at home, walk to work, or live in a city with a good public transportation system, you may have other options besides getting a rental. You might also carpool with a coworker or borrow a car from relatives. But if these options aren’t readily available to you, then it’s usually a good idea to insulate yourself from this hassle and purchase the additional auto rental coverage.
Carefully consider your needs and your budget, and get coverage that suits you. Rates can vary from company to company, area to area, or even the type of vehicle you need to rent. If you have a family, you may consider renting a mini-van or a large SUV.
The costs for insurance tied to the type of vehicle you need might exceed those available from your insurance provider. Be sure to scrutinize diligently before making a final decision.