Car Rental Insurance

Why I Buy Travel Insurance—And When

Travel Insurance

Chances are you've seen them—the ads for travel insurance or the box to check (with a hidden "skip" button) to add trip insurance when buying your flight.

Is travel insurance a good deal? Should you buy it? The answer is, of course, as clear as mud: "it depends."

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A Quick Primer on Car Rental Insurance

Fender Bender You've probably been there before. You're standing at the car rental counter, and the agent is trying to terrify you into purchasing an insurance package that totals more than the rental itself. After all, they're not getting rich off that super $10 a day deal that you snagged through AutoSlash!

Before you dismiss the pitch with a wave though, and initial eight times in the 'DECLINE' section of rental agreement, there are some things you probably should consider to ensure sure you're adequately protected in the event of an accident. Here's a quick guide to covering your bases when renting in the US (policies outside the US vary greatly).

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Emergency Sickness Protection -- Another "Insurance" Product that Helps the Rental Company More than the Renter

Sickness

Recently, we put out a blog post about Personal Accident Insurance (PAI), an over-priced product offered by the rental car companies that provides very limited coverage to a renter who is in an accident (hence Personal Accident Insurance). We linked to the policies of each company and stressed that the payments of $10 per day or so (plus taxes and fees) come out to more than $5,000 annually but PAI coverage routinely tops out at $2,500 in claims. It's a high-cost coverage plan for a low-likelihood event, and a severe accident would far exceed the "coverage" provided. Yet we received an e-mail from an AutoSlash user (or seller of PAI, hard to tell) who stressed that PAI is critically important for foreign travelers to the U.S., mistaking the limited $2,500 in coverage for an accident as resembling broader health insurance coverage. PAI is not health insurance and the rental car company is never going to sell health insurance. However, many firms are willing to offer an additional toothless coverage called Emergency Sickness Protection (ESP) to U.S. visitors with foreign passports. And like any other insurance product offered by a rental car company, one doesn't need ESP to recognize that the rental car company's ESP is a horrendously poor value!

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Personal Accident Insurance (PAI): Expensive but Limited Coverage that Doesn't Help Much in an Accident

Personal Accident Insurance

The rental car industry is proficient in creating insurance coverage options few renters should purchase but with some sense of importance in the title. One of those options is Personal Accident Insurance (PAI) which is often paired with the Personal Effects Coverage (PEC) we've addressed previously. At the most basic level, Personal Accident Insurance covers the occupants of the rental car in case of vehicular accidents, whether those result in injury or fatality. Like other forms of insurance offered by the rental car companies, it's expensive, the terms and conditions limit the actual coverage, and it's primarily just a profit center for the rental car company. Most renters discover that the insurance offering also happens to be entirely duplicative of coverage held elsewhere!

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What Happens if my Rental Car is Vandalized and My Possessions Stolen?

Car Vandalized

San Francisco gives the AutoSlash blog so much material; the city provides gifts no one wants! The airport has the honor of the highest in the nation taxes/fees on free rental days. The City and County decided to sue a rental car company because of decisions made by government agencies. Given rampant theft from cars (rentals and non-rental alike), the police decided to eliminate the task force addressing the issue. Even human remains get stolen from rental cars in San Francisco! Then the government decided to level additional restrictions on rental car companies because the government can't slow the pace of theft from all cars. And thefts from cars are still increasing to the point that has become a major policy point in upcoming elections and residents don't even report thefts anymore! Even the AutoSlash team doesn't rent cars in San Francisco. But here's a hypothetical -- what if our brain temporarily went missing and we decided to rent a car in San Francisco, then were shocked (shocked we say) to discover that our vehicle was vandalized and our possessions were stolen. What are the implications for a renter? The answer has two parts -- the possessions lost and payments that would be due to the rental car company.

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