Every state has different laws when it comes to auto coverage and it's ability to transfer to rental cars. There are times when your personal auto insurance will not cover you for a reason as simple as "our client was in a rental car outside his home coverage state of California and this was not a replacement rental. Therefore our insurance company will not cover his claim."

This was an actual response I received from a major insurance company while working for one of the largest rental car companies in the country. The insurance company was good enough to allow me to pass on the message that our customer he was now responsible for nearly $19,000 in damages, not the $500 deductible he was expecting.

After spending four years in a management position with this rental car company, one might think that I would stand here and preach for every person to always take all of the coverage that is offered.

The truth is, every situation is different. One very important factor is knowing the fine print on both your insurance policy and the rental car policy. If unsure, call your insurance company and ask them directly.

Whether your are able to obtain the correct information from the insurance company, the biggest question you need to ask yourself is: "How much is peace of mind worth to me?"

In New York, Damage Waiver coverage costs between $8.99-$11.99 per day depending on the value of the rental car. Damage Waiver is the coverage that waives the rental car company's right to pursue you for any damages to the vehicle. Is ten dollars per day worth it when trying to negotiate the busy streets of Manhattan or the snow squalls in Buffalo?

Is it worth it to you to have to report another accident to you insurance company? Even if your personal insurance will cover you, an incident in a rental car is often treated like an accident in your own car. This could mean deductibles or premium increases in the event of an accident.

In the end, purchasing rental car coverage comes down to personal preference. If you know the facts, and know that you are fully covered, then perhaps purchasing additional coverage is not a reasonable option. Be aware of the consequences, however, a few extra dollars a day could end up saving you thousands in the long run.

Learn more about this author, Joe Jenkins.
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