Should You Purchase Insurance on a Rental Car? - Paul & Dixon Insurance

Should You Purchase Insurance on a Rental Car?

So, you’re finally on vacation. Just one more thing to do before you reach your final destination: pick up your rental car. You get to the counter, and the rental agent asks if you want to take out insurance on the car. Uh-oh. You have no idea how to respond. Sound familiar?

This is a scenario where knowledge truly is power. To make an informed decision, you need to know what your regular auto insurance policy does and does not cover. The auto policy you have from Paul & Dixon would cover you against collision and liability on your rental car. HOWEVER…

…if you were to get into an accident, and the car needed to be sent to the repair shop, you could be liable for the money the rental company would lose while the car is “out of commission” and unavailable to rent to someone else.

With that in mind, you may wish to consider how much the rental company could lose if, say, the car was in the shop for a week. The cost of renting a standard SUV can be more than $50 per day (before tax), and some rental companies can charge about $150 per day for high-end luxury models, so you may wish to factor in the type of car you are renting when making your decision about taking out insurance on it

Finally, consider your own peace of mind. Are you willing to take a risk, or would worry about the “what if” stress you out while you’re on vacation?


Paul & Dixon is here to help! We’re happy to answer questions for our clients and help you weigh your options. As always, contact us with your questions.


Fax: 508-990-1784

Hours: Mon-Fri

9:00 AM - 5:00 PM


388 County Street
New Bedford, MA 02740


4436 Acushnet Ave
New Bedford, MA 02745