Car rental insurance is the classic traveler's dilemma – intellectually, you know it's probably a scam, but emotionally, we all have a fear that by not getting the extra insurance, something bad could happen. When deciding whether you should purchase care rental insurance, here are some things you should consider.

You May Be Covered by Your Auto Insurance Policy

In California, car owners are legally required to carry, at minimum, the following insurance amounts:

• $15,000 for injury/death to one person,
• $30,000 for injury/death to more than one person, and
• $5,000 for damage to property.

Although these minimums are not enough to 100% cover the cost of a major accident, they are better than nothing. For example, the property damage coverage in your existing car insurance may be more than sufficient to pay for scrapes and dents incurred when driving your rental.

However, if the rental car company does decide to charge you for damaging the vehicle, you may need to pay for the damage out of pocket and seek reimbursement from your own insurance carrier. This can add extra hassle after your vacation and could take some time to get your money back.

Related article: Four Tricks California Insurance Companies Use to Deny Your Claim

Before going on vacation, ask your insurance company about your coverage. Sometimes, car rental insurance is included in homeowners or apartment rental insurance.

You should find out what scenarios the company will, and won't, reimburse you for, as well as your insurance limitations and the deductible. You may find that you are only covered in certain countries, that the deductible is particularly high, or that your work trip isn't covered.

Your Credit Card May Provide Car Rental Insurance Coverage

If you are a licensed driver but don't own a car, your credit card may also provide rental insurance. This is often provided as a “free” incentive but is one that many people are not aware of.

In order to take advantage of your credit card's rental car coverage, you must charge the entire car rental to the credit card. Additionally, you cannot accept any coverage offered by the rental agency, such as the company's collision damage waiver (“CDW”) or loss damage waiver (“LDW”). Purchasing insurance from the car rental company may void your credit card's coverage.

You should speak with your credit card company to understand the details and limitations of your rental coverage. Possible restrictions include:

• The length of time the rental insurance is valid – some cards will only cover up to 15 days
• No coverage for damage to wheels or rims, or from damage caused by gravel roads.
• The type of vehicle. Many cards won't cover expensive sports cars or off-road vehicles.
• What country you will be in.

Your credit card may only offer secondary coverage, meaning that you have to reach your auto insurance limits before your card's policy comes into play. You will still need to pay the car rental company upfront for damages before recouping losses from your credit card.

Knowing what you are, and aren't, covered for will help you decide whether your credit card offers enough insurance for your car rental.

If I Buy Separate Rental Coverage, How Much Do I Need?

If you decide that separate rental coverage is the right option for you, there are four different categories of protection you should consider:

• Collision damage waiver/loss damage waiver (CDW / LDW), which protects you from vehicle damage, vandalism, or theft to the rental car.
• Liability insurance, which covers damage to property or other vehicles while you are driving the rental car as well as medical bills for others injured in the crash.
• Personal accident insurance (“PEI”), which covers medical costs for you and the passengers in the car if they are hurt in a rental car accident.
• Personal effects coverage (“PEC”), which covers personal items damaged or stolen from the rental.

If you opt for the CDW / LDW, you should make sure it covers the full value of the car, as well as any administrative fees the rental agency may charge while the car is out of commission. If you are considering getting PEC, you should weigh the value of your luggage, clothes, and electronics against the cost of the coverage.

It's always better to have higher coverage and lower deductibles for liability and personal accident insurance, if possible. If you don't have sufficient auto or health insurance, it may be a good idea to invest in these when renting a car.

Contact an Experienced Personal Injury Attorney Today

Dealing with insurance companies can be a hassle, especially when it comes to rental cars. If you were involved in a car accident with a rental car, the personal injury lawyers at the Law Offices of Freeman & Freeman can help you untangle the red tape. To set up a free consultation, please contact us by calling (707) 575-7141 today.