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The Hidden Compliances in Global Mobility

Why Expats Should Say ‘Yes’ to Car Rental Insurance

Why Expats Should Say ‘Yes’ to Car Rental Insurance

Travellers often debate whether buying rental car insurance in the United States is worth the cost. But for Expatriates, it’s almost always a smart idea to purchase the coverage.

To buy, or not to buy? That is the question when it comes to the long-debated topic of purchasing insurance from rental car companies. Many travellers have stood at the rental counter weighing their options and crunching numbers in their head while a salesperson rattles off a list of all the reasons it is a must. While the average traveler may be able to get away without the purchase, for Foreign Nationals purchasing the insurance is a smart idea.

In some countries, such as the United Kingdom, purchasing the car rental insurance is mandatory, so you won’t have a choice. Do your research on your destination country before arriving so you’re prepared for the extra expenses, and look for companies that offer bundled packages to save more.

Rental Insurance in the United States

If you don’t have personal auto insurance in the United States, then it is vital to purchase rental insurance, and in most states, it’s mandatory. Even if you still have active auto insurance coverage in your home country, it is not going to help you if you get into an accident while in the United States. Many renters with a primary auto policy in the United States are still at risk of being hit with huge costs if an accident occurs in their rental vehicle. It is important to know what your personal auto insurance covers before you make the choice to forgo the rental insurance. Many policies stop covering your rental car after 31 days, and some do not cover the rental if it is being used for business purposes.

Is Your Personal Coverage Enough?

If you choose to skip the rental insurance and stick with your personal coverage, there are a few other possible charges to keep in mind. Your plan may not cover you from every charge the rental company can enforce, such as “loss of use” charges. These charges include loss of profit to the company while the car undergoes repairs, reduction of vehicle value, and administrative fees. You will also have to meet your insurance deductible to repair damages, potentially increasing the cost of your annual insurance premium for five years or more. In the end, this can cost you thousands more than if you purchased the rental insurance.

Credit Card Rental Coverage

You may have heard that it is possible to use credit cards as rental coverage to protect yourself instead of getting rental insurance. While most major credit card networks offer rental insurance, it can vary greatly when it comes to benefits and requirements. Most of the time your credit card only offers secondary rental insurance. This means it will only cover the cost of damages not covered by your primary car insurance coverage in the United States. If you wish to use rental coverage from your credit card, then you must book your rental car with your credit card and in the name of the credit card holder to be qualified.

As with all insurance policies, it is very important that you find out exactly what your credit card rental coverage will protect you from. Some credit card issuers don’t offer rental car insurance, and the coverage may vary within the same credit card network. Some networks have a limit on the days they cover, with some only covering 15 consecutive days domestically, and 31 rental days abroad. It is recommended you contact your credit card company in advance to discuss any possible coverage you may have in detail.

How Bundled Packages Can Save You More

As an Expat in a foreign country, you want to ensure that you are protected from all unexpected costs. Purchasing rental insurance will help mitigate costs and liability for both you and your company. While you want to be protected, you also don’t want to be taken advantage of with high rental insurance costs. The typical cost for rental insurance is $25 a day, and this is an additional cost added to your rental car. By purchasing a bundled package, you can get great savings and additional benefits from your rental company. You can also look for companies that cover additional drivers at no extra cost. This way your spouse, friends, and co-workers are all protected under the same policy.

Next time you’re standing at the rental counter weighing your options, remember that spending a little extra money upfront can save you thousands of dollars in the end. After all, can you really put a price on peace-of-mind?


By Amy Oberlies, International Autosource

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