Rental car insurance: Do you need it?

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Author: Thomas, Irene Middleman

After maneuvering through the maze of airport walkways and waiting for your luggage, you are in no mood to be subjected to pages of gobbledygook about "liability," "waivers," "accidents," and "death," handed to you by a smiling rental car agent. If you're like most business travelers, you furtively skim the pages long enough to seem to know what you're signing. Then you either pick "No" to all coverage, hoping that nothing will happen, or you pick "Yes" but are not sure if you really need coverage.

What can you do to get through the mumbo-jumbo? Ask yourself these questions before leasing your next car:

Are you already covered? All it takes is a call to your insurance agent or your company's personnel director to find out. "People come up to the counter and ask the agent if they're covered by their personal insurance," says Lauren Garvey, Public Affairs Manager for the Hertz Corporation. "The agent has no idea." It's your responsibility to know the extent of your coverage, whether with personal or company insurance plans or with a credit card company.

What are the limits to your existing coverage? Examine policies carefully for conditions and exclusions. Most credit card companies will only pay if the customer has denied the rental company's Loss/Damage Waiver. Check home-owners' policies for any coverage of personal belongings in a rental car. Also, determine whether your medical insurance is sufficient to protect the occupants in case of an accident.

Are there exceptions within the rental car coverage? Even if you do say yes to a rental car policy, you may not be covered in some cases. For example, Hertz will not pay personal accident insurance benefits if an accident occurs while you are under the influence of alcohol or narcotics (unless prescribed by a physician). Nor will it cover such personal effects as currency, stamps, or contact lenses. And most policies require the names of all additional drivers to appear on the agreement, or claims will not be honored.

Above all, be skeptical. Ask questions of your insurance and credit card companies if you need explanations. Always read rental agreements thoroughly before signing. If an agent cannot answer your questions, or if you feel pressured to buy coverages, take your business elsewhere. And take a copy of the signed rental agreement with you. A little research is a small price to pay for peace of mind.

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By Irene Middleman Thomas