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Unfortunately, this is one of those questions that doesn’t have a simple yes or no answer. I will give you some points to consider, but in the end, your choice will come down to a decision on transferring the risk or retaining the risk.
Why would I want to consider buying this coverage?
The loss damage waiver offered by rental car companies provides you protection from the following items should your rental car be vandalized or damaged in an accident (whether it is your fault or not).
- Lost rental income of the vehicle while it is being repaired
- Cost of repairs needed on the vehicle
- Towing fees
- Diminished value
- Rental company administrative fees
The cost for this coverage is usually between $20 to $25 per day.
Why would I decline this coverage?
- Over the course of a week long rental you will typically pay between $200 to $250 for this coverage
- Most insurance policies will extend coverage for the physical damage to the rental car, as long as one of the cars on your personal insurance policy is carrying comprehensive and collision coverage. Your deductible will apply to the rental car just like it would to your own car
- Many insurance companies are now offering to cover some or all of the lost rental income to the rental car company. Check with you agent to see what your policy provides
- American Express, MasterCard and Visa will cover loss of use charges as long as the rental company can provide them proof of the loss. Discover explicitly excludes this coverage. Some credit cards will also cover your deductible on your personal insurance policy. It is best to call the card company directly to verify.
- American Express, 800-338-1670
- MasterCard, 800-622-7747
- Visa, 800-847-2911
Conclusion
This decision really comes down to your comfort level and risk tolerance. My personal position is that I never take the coverage offered by the rental car companies. I have been renting cars for 30 years and at the time of this post, never had a claim. I have saved several thousand dollars in fees over the years. However, the risk does still exist that even with great auto insurance and a solid credit card in my wallet, I could have an event that isn’t covered. Our goal is to help you make an informed decision so you aren’t caught off guard if something does happen. Check with you agent, check with your credit card company and then check your tummy to make sure you can sleep at night!