The most common question I get during the summer months is should I waive rental car insurance while on vacation. There is actually no right answer rather two options and potential benefits of each. I will explain why you should buy the rental car insurance and why you should waive it, then you can make the best decision. If you want me to tell you which option to choose then you are in the wrong place.
Why you should buy rental car insurance
I must be crazy to recommend you paying $20-40 per day just to have insurance for that rental car right? Well there are valid reasons why you should not use your auto insurance but rather pay the additional cost. Consider the fact that while you are on vacation you are probably driving in an unfamiliar area which can lead to confusion and possibly accidents. Most rental companies offer the insurance if you don’t have full coverage on your auto policy so they protect their investment. If you take the insurance and something happens usually there is no deductible and the accident won’t make your insurance policy increase. Each company is different so read the fine print but most companies operate this way.
Here is a list of reasons to buy the rental car insurance:
- No deductible owed if at fault in accident
- Your personal auto insurance won’t increase due to the accident
- Driving in a new location can cause confusion and lead to accidents
Why you should waive rental car insurance
Most people waive this insurance because they have their own full coverage auto policy. If you have liability only it will be required that you buy their insurance. Obviously the number one reason you should waive the coverage is the extra cost which can add up quickly over a long vacation. If you have full coverage on your current auto policy you are protected if you cause an accident not only for liability to the other driver but to repair the rental car. Most major insurance companies will require you to pay your deductible to repair the rental car so know what your collision deductible is. It may make sense to reduce your deductibles while you go on vacation just in case something happens you will owe less out of pocket. The main downside to using your insurance is if you are considered at fault in a accident it will most likely increase your auto policy rates by 15-30% for three years.
Here is a list of reasons to waive rental car insurance:
- It costs approximately $20-$40 per day
- Your current policy will cover the car if you have full coverage minus your deductible
- You will deal with your insurance company if something does happen