Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 18, 2020

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Here's what you need to know...

  • Many credit cardholders receive some form of insurance toward car rentals from their card agreements
  • Deductibles are how much you pay to the insurance carrier when filing a claim
  • In some states, you are responsible for purchasing coverage that protects you if you are injured

When making plans for a vacation, one item might be on the bottom of your list. Your car insurance coverage.

Though, if you are attempting to get around on borrowed wheels, and usually take the train, then you may want to consider a short-term insurance plan, also known as short-term, or temporary car insurance.

Many vacationers take on the rental policy that the car rental company offers even if they have their own insurance coverage.

However, if you do not own your own vehicle, and seldom drive except for a once-yearly trip to meet up with family 800 miles away, you need car insurance, but only during this time of year.

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Table of Contents

Comparing Rates

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You probably already knew all that or may have guessed it. What you are clamoring to know is how to buy this insurance while saving some money.

You may be curious about a few similar-sounding insurance products when you are shopping for such insurance.

Here are some of the essential products to look for:

  • Credit card rental car coverage
  • Car rental company insurance
  • Short-term insurance

The issues with car rental company insurance is that it only covers rental cars.

For instance, you might just be sharing driving responsibilities on your girlfriend’s car as you make your way on your cross-country road trip.

Same goes for any type of insurance coverage your credit card company would offer up. It is for rental car situations exclusively.

Otherwise, standard vehicle insurance plans generally require a six-month obligation, which is generally far more costly than just purchasing the coverage you need for the period when you are going to drive.

It is worth noting that even if you regularly drive your own vehicle and carry your own insurance, it is still advisable to purchase the rental car insurance too, in many cases.

Here is what you’ll need to account for:

  • Rental insurance on your auto insurance policy most likely specifically only covers when your vehicle is in the shop due to an auto-claim-related event.
  • Your car insurance only covers your vehicle up to its value. Most people drive older cars these days, and rental car agencies are known for keeping fresh, new cars in the rotation.
  • Many credit cardholders receive some form of insurance toward car rentals from their card agreements. However, they are not going to cover everything.

Here is what they don’t cover:

  • You must book the vehicle rental under your own name on the credit card that provides the insurance. It is not good enough just to be carrying it with you.
  • The credit card insurance generally gets treated as a secondary insurance, though you may have to forgo the rental agency’s insurance to use the credit card’s coverage.
  • Check with your credit card companies to find out how their insurance works, if they offer you anything as their customer
  • Often, credit cards merely pay the cost of a deductible for a claim, but nothing more.

This is why it is so important that you contact your credit card carriers to find out what benefits they offer if you book your rental car with them.

Here is what you should ask about:

  • Loss of Use, usually if more than 80 percent of the vehicles are being rented.
  • If you damage a vehicle significantly enough, but it is not totaled, that can spell financial burden on your pocketbook. Check to find out how much your credit card pays toward this, or what is known as Diminished Value.

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Buying Short-Term Coverage

The easiest way to get insurance for someone who normally does not have coverage is through a short-term auto insurance policy.

Basically, you will want to purchase coverage for the following areas:

  • Bodily injury liability
  • Property damage liability
  • Uninsured motorists
  • Underinsured motorists
  • Comprehensive
  • Collision

Deductibles are how much you pay to the insurance carrier when filing a claim. You may also consider it as an amount that would be deducted from your benefits.

Make too high of a deductible and it can be financially painful. Yet, if it is too low, the insurance policy premium may be too high to be affordable.

Bodily injury or property damage liability are vitally important in states where a fault is established when an accident occurs. It pays other parties for whatever property damage and injuries you may cause other people.

Many credit cards will provide this protection, but not at the limits that are considered actual norms.

Collision pays for the actual impact to the vehicle. Comprehensive covers anything else, as long as it is detailed in the insurance policy documents.

Deciding on Coverage

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When you have determined the deductibles you are comfortable paying and the upper limits you would like your insurance to cover, then you are officially ready to go shopping.

If you are wondering, the insurance industry recommends 100,000 dollars per person for bodily injury liability and 300,000 dollars per accident for all injuries to ensure you owning anything extra.

In other states, you are responsible for purchasing coverage that protects you if you are injured. This is called personal injury protection, or PIP, and varies according to individual states.

Shop around and look for as many quotes as you can. This way, you are casting your net far and wide, and increasing the likelihood that you will find the most affordable coverage.

Start comparing car insurance rates now with our FREE tool below! Enter your zip code now to get started!

References:

  1. https://www.esurance.com/info/car/myth-rental-car-coverage-is-always-necessary
  2. http://money.cnn.com/magazines/moneymag/money101/lesson22/index3.htm
  3. https://www.esurance.com/info/car/the-pros-and-cons-of-high-deductibles
  4. https://www.allstate.com/tools-and-resources/car-insurance/bodily-injury-liability-insurance.aspx
  5. https://www.nationwide.com/personal-injury-protection.jsp