The Rental Car Insurance Dilemma

I keep reading horror stories about rental car companies ripping off customers by claiming that there was damage to the vehicle. The poor guy who rented the car for a couple of days and returned it in perfect condition, now finds himself with a big bill for damage for which he claims he was not responsible.
Of course one way around that is to purchase the insurance offered by the rental car companies, but it’s expensive. I checked on line and, in a couple of hypothetical transactions, found that the collision coverage was going to cost me an additional $31 a day. That’s more then $200 for a week.

In planning a trip a few years ago, I called our terrific State Farm agent, Kit Okazaki, in nearby Makawao town to ask about collision insurance coverage for rental cars.
Kit pointed out what I should have known—that there’s no need to buy additional insurance because I was already covered. My existing State Farm auto insurance policy has a clause that covers me when driving a rental car anywhere in the U.S.
“That’s great,” I said, but I’m also going to be in France for two weeks and will need a rental car when I’m over there.”
Kit said he can always sell me an additional policy, but I should check the terms and conditions of the Citi Bank credit card I use. Chances are, he said, if I had one of the better cards, it would cover me should I have an accident in a rental car while anywhere in Europe. Sure enough, Kit was right. My Citicard covers me as long as I decline the rental car company’s offer of collision insurance and use that card to pay for the actual rental.
Furthermore, as I was plowing through all that fine print, I also discovered that my Citi MasterCard will cover me if I have to cancel a trip for almost any reason and I lose a prepayment . . . our recent Mississippi River cruise, for instance.
None of this means I don’t believe in having travel insurance. I do, especially if you travel a lot or if, like me, you’re getting along in years with an increased chance that some kind of a medical problem could occur while we’re traveling. I buy an annual travel insurance policy because I’m away three or four times a year and it’s significantly cheaper than buying a separate policy for each trip. In particular, I make sure I have coverage in case I should ever need “medical evacuation”.
It’s true that a lot of this is in the fine print of the policies or in the credit cards’ “terms and conditions”, but it’s definitely worth checking.