Is it necessary to buy rental car insurance?

It's a standard question at a rental car company counter: "Do you need rental car insurance?" The answer can be muddy, which is why preparation is key. Here's how to sort out the specifics.

Do I need rental car insurance?

Many vehicle insurance policies already include some sort of car rental insurance coverage — so if you purchase a rental car policy, you're paying extra when you may not have to. Ask your State Farm® agent these key questions:

• Do Liability, Comprehensive and Collision coverage, as well as any deductibles, extend to rental car agreements?
• Are administrative or towing fees for rental cars covered?
• Does homeowners or renters insurance extend to personal items in a rented car? This is sometimes referred to as off-premises coverage.
• Does your auto policy offer loss of income coverage? If the vehicle becomes damaged during your rental time and repairs are needed, the company may charge you for the vehicle's potential earnings while it's being repaired.

Call your credit card company

If you pay for a rental car with a major credit card, there's a chance that the card issuer offers secondary car rental insurance at no charge. This typically helps only with additional expenses and the deductible beyond your existing auto policy.

Review your rental coverage options

Don’t sign anything or agree to coverage without reading the policy thoroughly. Insurance requirements and rules vary from state to state.

• Unless your auto insurance coverage extends to rental cars, you may need to get some kind of insurance coverage from the rental organization. In place of collision or comprehensive, you may be able to obtain a rental car company loss damage waiver, or LDW, which can help cover damage-repair costs, administrative fees, and towing.
• If you don't have health or medical payments coverage on an existing policy, you may be able to purchase personal accident coverage.
• If you're renting from a nontraditional car sharing company, review the agreement. While insurance is sometimes included in the fee, there may be restrictions or extra costs, particularly if the car is stolen.

Do I need international car rental insurance when abroad?

Since few insurance or credit card companies extend car rental coverage when traveling internationally, contact your agent and credit card company well in advance of your trip. Paying for international coverage might help if you have an accident or the vehicle is stolen while traveling abroad.

Renting for work or play?

Coverage extensions from your existing policy or your credit card may not apply if you're renting a car for business. In that case, review the coverage options through your employer.

Select the right size rental vehicle

When reserving a car, know how many people will be traveling with you and how much luggage room you will need. You'll want to have enough space to see clearly out of each window and to keep passengers comfortable. Remember, middle seats are often small for adults but typically fine for children, unless car seats are needed. If you need room for more than four adults, consider choosing a vehicle with a third row.

Inspect the rental car

Give the car a once-over to inspect for prior body damage before driving off. Don't miss checking these essentials:

• Tire pressure and condition
• Brakes
• Seat belts
• Lights
• Windshield wiper condition and wiper fluid level
  

Also double-check that the car is equipped with important safety features, and verify that the add-ons you agreed to are accounted for and functioning appropriately.

Verify that you're protected

Car companies typically offer the option to purchase rental insurance, but your personal auto policy may carry the coverage you need. Determine whether your situation merits additional coverage.