One of the most important things to consider when renting a car from a car rental company is whether or not you need to purchase the insurance offered by that company. There are many factors that go into determining whether or not you need insurance from the car rental company. For example, your insurance needs are likely to be different when you are traveling for work than when you are traveling for pleasure. There are often differences between someone renting a car for their own small business and someone renting a car for their employer's business.

When you rent a car, the car rental company will typically present you with three specific types of insurance options: personal effects coverage, liability coverage, and physical damage coverage. Understanding these options can help you to look at your own insurance coverage and/or the insurance coverage of your employer and make an informed decision.

* Personal Effects Coverage. This form of insurance refers to damage or theft that may occur to your personal effects while in the rental car. This could include items that you own or it could include items owned by your employer. Many homeowners insurance policies will cover the personal effects of the insured person. For businesses, a specific endorsement can be added to the insurance policy to include personal effects. If your items are covered in these ways, you don't need insurance from the car rental company.

* Liability Coverage. This form of insurance covers injury or damage to property that is caused while operating a rental car. If you are renting a car for your employer under your name, your company's insurance policy may not cover liability. Generally speaking personal car insurance won't cover liability on a rented car either, so you should definitely check with your automotive insurance company. If there is not liability insurance from another source, you should probably purchase the insurance from the car rental company.

* Physical Damage Coverage. Physical damage coverage is perhaps the most extensive and confusing type of insurance offered by a car rental company. This insurance covers damage to or loss of the vehicle. In some cases, personal insurance will cover physical damage on a rental car. If the car is rented for business purposes, the business insurance agreement would have to include physical damage coverage in order to be insured properly. In other cases the agreement for the credit card used to secure the rental car could cover physical damage.

Understanding these sorts of coverage is the first step in deciding whether or not you need insurance from a car rental company. From here you will need to speak with your personal or business insurance representative to find out which types of insurance you may need to purchase.

Learn more about this author, Bob Younce.
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