Summer is in full swing and many of us are heading out on vacation. Pinching pennies becomes very important if we want to fully enjoy this time. The topic of insurance often comes up in relation to vacations. What do you need and what can you do without? Today we are going to consider rental car insurance and trip insurance.
Do I really need the rental car insurance? As is with most questions like this, the answer is “it depends.” First, be sure to pay for the rental with your credit card. Though you might want to cover it out of your bank account and pay for it with your debit card, you run an additional risk. The rental car company may put a big hold on your debit card. Sometimes it even places a hold on your credit card; that ties up money you may need for your vacation. Be sure to ask the rental car company what its policy is concerning holds on your cards.
Check your own automobile insurance policy since it may cover rental cars. If you are unfortunate enough to have an accident while on vacation, the claim will cost you nothing out of pocket (except for the deductible); however, it may eventually cost you with higher rates in the future. Again, check the policy or call your insurance agent. My agent gave me a brochure that told me exactly what is covered by my insurance company, so check your options with your car insurance company first.
Your credit card may offer free collision coverage on rentals. However, check to see if it is for primary or secondary coverage. If it is secondary, your personal insurance must pay first. Read the small print on the credit card agreement or check the website.
Buy a special insurance policy from a third-party insurer. Look on the web for Insure My Rental Car or Protect Your Bubble for policies that cover a single trip or give you year-round coverage.
Do I need traveler’s insurance? That is another “it depends” answer. One in six Americans has travel plans interrupted by either illness or natural disasters and only 22 percent of those have trip insurance to cover the costs. If the trip is expensive, of long duration or has a very involved itinerary, you might want to consider trip insurance. The charge will be money well spent when you are rebooking with airline change fees. However, this is another area that might be covered by your credit cards.
Your local insurance company may be able to add a traveler’s insurance policy to your regular policies. However, be sure to look into this early. My agent told me it took them a little while to get the policy ready. Also, there are web companies that specialize in traveler’s insurance. The pricing is often based on the cost of the trip and the age of the travelers, so be sure to have this information before you start the process.
A recent study by CardHub showed many rewards credit cards have accident and luggage coverage, with 88 percent of the cards surveyed having accident insurance and 63 percent having luggage coverage. Of those cards offering luggage coverage, 73 percent cover lost luggage, 45 percent cover delayed luggage and 18 percent cover both. Check your cards for particulars.
Before you travel, it is definitely a good idea to see what if offered on your regular insurance policy and/or by your credit card company.
Roxie Rodgers Dinstel is associate director of Cooperative Extension Service, a part of the University of Alaska Fairbanks, working in cooperation with the U.S. Department of Agriculture. Questions or column requests can be e-mailed to her at firstname.lastname@example.org or by calling 907-474-7201.