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July 28, 2021

Do you really need to buy rental car insurance?

Does anybody actually buy rental car insurance? I know I usually don’t.

Car Every time you rent a car, you can expect to be asked to accept or reject the vendor’s offer of car insurance, known as loss damage or collision damage waiver. But do you really need to pay that extra $15 a day?

Well, maybe.

It’s no secret that most higher-end credit cards like Amex Gold and Platinum take care of the basics like damage collision, theft, liability, fees but those ‘basic’ cards may not – unless you’ve signed up at the source, generally for a $25 to $40 annual fee.

And, if you’re driving outside of North America, you may find yourself out of luck as many cards are good for Canada and U.S. travel.  

You need to call your credit card company before renting a car to find out what your specific card provides.

Of course, your private car insurance is another option. But that may not work either. If you’ve already dropped the collision coverage on your existing clunker, for instance, remember that you’re going to be limited to the coverage you have on that vehicle, including the deductible.

If, for example, your existing policy has a high deductible, the additional rental car insurance might actually turn out to be the better deal.

And there's the issue of business versus pleasure. If there is a problem, you may have to be able differentiate beween the two when making a claim. Talk to your insurance carrier about your particular circumstances.

What do you do to protect yourself when you rent a car for an occasional trip? Have you had a problem when making a claim?

By Gordon Powers, MSN Money

* Follow Gordon on Twitter here.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...