If you’ve ever rented a car, you know that one of the first questions you have to answer when you step up to the rental counter is whether you’ll be purchasing auto insurance. How should you reply? It depends … on a number of factors. For example, you’ll need to know what types of insurance you already carry, how much insurance the rental company requires and how much risk is involved in the situation.

When you go grocery shopping, you usually don’t want to buy items you already have in the pantry. The same is true with auto insurance. Take inventory of what you have before you buy more.

  • Do you have auto insurance for your personal vehicle? If so, it may apply for rented and shared vehicles as well. What types of coverage do you have and what are the limits for each? Check the auto insurance coverage types here and know how much coverage your policy provides for each. This information may be easy to find on your auto insurance ID card. If not, you may need to look at your policy.
  • Do you have health insurance? Would it cover any injuries that you sustained in an accident?
  • Will you be paying for the rental car with a credit card? If so, does your credit card automatically provide some coverage? Often there is some built in coverage, particularly for losses due to theft.

Next, you’ll need to know the rental company or car sharing companies’ requirements. If you only carry minimal coverage on your personal vehicle and the car-share company requires comprehensive coverage, obviously you’ll need to buy insurance.

And, if the risk is higher than usual, you may want to purchase higher liability limits. Consider how many passengers are in the car, if the driver is inexperienced, if there are adverse or unfamiliar road conditions and if you’ll be driving in high risk scenarios such as during rush hour in a congested city. All of these scenarios may be good reasons to increase your liability limits so you’re prepared for worse-case scenarios.

Whatever you do, avoid underinsurance.

If you’re underinsured and in an accident, you’ll be responsible for any costs that go beyond the insurance limits. Make sure you’re well-covered. It’s especially important to have good liability insurance, which may not be included in the standard car rental or car sharing plan.

Of course, you don’t want to pay for insurance you don’t need, and that’s understandable. Even worse, though, is being underinsured or uninsured when you’re involved in an accident. Don’t take risks. If you have questions about your coverage, contact us.  Need an auto insurance policy? Get a quick quote here.