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Insurance for the Auto Uninsured

I've got a new post over at Greater Greater Washington exploring the ins-and-outs of rental car insurance for people who don't have auto insurance. It's a shame that the options available are so limited, and I hope that they improve as insurance companies figure out that this is an untapped market.

(from Roger Penguino on Flickr)

I rented a car last weekend, and made sure to keep mental notes about how the conversation about rental insurance went down.

We filled out all the paperwork inside, the Enterprise rep decided which car to give me, then he grabbed the clipboard and we walked outside. In fact, the conversation about the insurance didn't begin until I was nearly ready to drive away. The rep casually asked if I wanted to opt for the "full coverage". I asked him to explain, at which point he gave a confusing explanation that hardly told me what I'd be getting.

It wasn't until I took a look at the paperwork to see that he wanted me to buy three products: a damage waiver for $17.99 per day, supplemental liability protection at $12.99 per day, and personal medical coverage at $2.99 per day. That's a lot of money, especially considering that the rate for the car was $19.99 per day, and while I opted for the supplemental liability coverage, I didn't need to buy the other two from the rental company.

The problem with this system is that, because it's hard for people to understand what they're being asked to sign up for, some will opt in to everything, potentially overpaying; while others will decline everything, thinking it's a bad deal, and drive away at more risk than they wanted to be.

Clear, simple, and reasonably priced insurance options are needed for those who don't have their own auto insurance.

Comments

Adam D. said…
You potentially still overpaid for your coverage. It's a buried fact that rental car agencies in the US are required to provide the state mandated minimum liability insurance within the cost of the rental. Additional liability insurance covers you if you have additional wealth to protect. Add to that collision damage waiver provided by most credit card companies, and excess medical provided by some and you probably don't need to purchase the insurance. The one clear advantage is that buying the rental agency insurance saves a lot of hassle in the event of an accident.
Rob Pitingolo said…
Adam, as I note in the GGW post, buying nothing at the counter gets you the state minimum required coverage. On the liability side, I'm not comfortable with just how limited it is.

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