Do you need car rental insurance?  That's what Dave Ramsey thinks

Do you need car rental insurance? That’s what Dave Ramsey thinks

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Don’t make a decision about car rental insurance without reading this.


the main points

  • Car rental insurance is an optional type of coverage that can be purchased when you rent a car.
  • Financial expert Dave Ramsey stated that it is worth paying in some situations.
  • If the driver’s car insurance has a high discount or excludes rental cars, getting car rental insurance can be worth it.

When the driver rents a car, he has the choice. The rental car company will offer to sell insurance for the rental car, and the driver will need to make a decision to buy it.

Car rental insurance can cover the costs if the driver of the rental car causes an accident. He can also pay for personal items inside the vehicle if personal baggage coverage is chosen, and pay medical bills if the driver chooses to purchase personal accident insurance.

While getting that extra protection might sound smart, it’s important to think carefully about whether purchasing this specific type of auto insurance is worth it. Financial expert Dave Ramsey has given his opinion on the matter.

Ramsey’s advice on car rental insurance

When it comes to whether you should buy car rental insurance, Ramsay believes that it depends on what other types of insurance coverage you already have.

“The bottom line when it comes to car rental insurance is to make sure you don’t pay for something you don’t need.” Ramsay solutions Blog states. “But it also isn’t worth the unnecessary risk to save money.”

Ramsay points out that in many cases, drivers already have insurance in place that offers the same protection that the rental car company is trying to get them to buy. “Generally speaking, your car insurance will cover your rental car in the same way that it covers your own car. So you probably don’t need rental car insurance,” Ramsey said. This is especially true for drivers who have comprehensive coverage, adequate liability insurance, as well as health insurance to cover medical bills in the event of an accident.

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Are there times when buying coverage is a good idea?

Although Ramsay says that many people are likely to forgo car rental insurance because their auto policy already offers the same coverage, there are exceptions. In particular, it states that drivers should purchase rental car coverage if their standard car insurance excludes rentals or has a large discount.

Those who do not have a car and are therefore uninsured should purchase rental coverage, as well as individuals who travel for work, as their personal insurance company may exclude coverage due to the commercial nature of the trip.

However, for those who rent cars regularly but don’t own a car of their own, Ramsay suggests looking into auto insurance for non-owners rather than routinely paying for rental car costs. Non-owner insurance can be less expensive and offers more comprehensive protection than the policy offered by the car rental company.

Ramsey’s advice on this issue is worth listening to, as there are certainly times when additional protection may be needed – but it’s not worth paying for redundant coverage outside of these circumstances. Drivers should check the terms of their car insurance policies before renting a car in order to determine if it makes sense for them to purchase the insurance offered by the rental car company. In many cases, they will not find additional coverage required.

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