What You Need to Know Before Wrecking a Rental

NEW YORK (MainStreet) — Consumers on vacation typically don't consider car rental insurance until they get to the counter of their leisure destination. This last minute thinking can result in over coverage or having no coverage at all.

"When you buy coverage from the car rental company, it's a one stop shop, which means you're paying for a variety of unnecessary fees and the price is often higher than a third party option," said Stephen Ebbett, president of Protect Your Bubble, a provider of rental car damage insurance coverage.

In most cases, an umbrella liability policy may be cost effective because it provides protection for accidents incurred while driving an owned car or rental car. Expect to pay $200 to $300 annually for a million dollars worth of coverage.

"An owner's insurance policies may have a clause for rental cars but before relying on your personal car insurance, keep in mind that fine print may require the driver to pay a deductible depending on the policy and making an accident claim on a rental car, can increase premiums on personal car insurance the next year," Ebbett told MainStreet.

Credit cards usually cover damage to or loss of the rented vehicle but in most cases, credit card insurance benefits are secondary to either personal insurance protection or the insurance offered by the rental car company.

"Insurance benefits offered by credit card companies differ by both the company and/or the bank that issues the card as well as by the level of credit card used," said Michael Barry, spokesperson with the Insurance Information Institute (III), an insurance advocacy organization.

In addition to personal auto coverage and credit card protection for car rentals, an emerging option is third party coverage through companies like Protect Your Bubble, which provide protection in the event a rental car is damaged or stolen for $7.99.

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