Is Rental Car Insurance Really Worth it?


Have you ever rented a car? If you have then you probably know that rental car companies offer optional rental car insurance…but is it worth it?

One such rental car insurance package is often called the “Full Damage Waiver” and actually I highly recommend purchasing this insurance package.

When I rented a car with Enterprise recently I got the “Full Damage Waiver” added to my rental agreement. It cost me just under $17 per day.

Now, I know what you are thinking, and yes it can add up if you have the rental vehicle for a long time. I would think that most rentals wouldn’t last for more than a week or two. So at the end of one week the total cost to add this would be about $119. If you keep the vehicle for two weeks then the cost would be about $238.

Why Rental Car Insurance?

So now you are likely wondering why would you pay for this and I will tell you. If you don’t get the coverage then:

  1. If you damage the rental then the credit card you used to place the security deposit will immediately be charged the amount of the deductible on your auto policy. Most often this means a charge of $500 or $1000. (assuming you have the correct coverage on your policy)
  2. If you are at fault in a collision then your driving record will be affected causing the cost of your auto insurance to increase at your next renewal.
  3. You could be charged additional costs as well. These additional fees can include Administrative fees, Loss of Use, Diminishment of Value and possibly others depending on the rental car company. It is possible your auto insurance policy may pay one or more of these fees. In a recent claim only the Loss of use was covered.

So, in short if you purchase the “Full Damage Waiver” you can just walk away from any and all damage, get your deposit back. No fees or surcharge will be applied since your insurance company won’t have to pay for the damage.  This alone makes rental car insurance well worth the investment.

Next time you rent a car look for this waiver, but it may be called something else. Read the contract and add the waiver to save yourself a boat load of hassle that could come your way, if damage is done.

About the Author:

*Please note, I am a licensed agent in the state of Massachusetts. Details may vary state to state. I have prepared this as a summary of my experience with rental cars, it is intended as an item for consideration. Please do your own research and read your contracts when renting a vehicle.

Written by Bonnie J. O’Hara CISR
Barrows Insurance Agency, Inc.