Auto Insurance Myths and Reality

Myth: You have to purchase a policy that covers car rentals.
Reality: You may be able to save money by temporarily adjusting your current policy to cover rentals as the need arises. Those who carry the minimum state required insurance could find that they’re in a bind when it’s time to secure a rental. Unless your credit card covers car rentals (and be sure to double-check exactly what it covers), your only option may be to buy the expensive coverage offered by the rental company. First, check with your insurance carrier to see if you can temporarily upgrade the policy. This option is usually a lot less expensive than purchasing the coverage offered at the time of the car rental. Insurance companies such as Progressive and Allstate allow their customers to upgrade or downgrade policies without incurring penalties or fees. Policyholders will be charged a prorated rate. Customers who have limited liability insurance who upgrade to a comprehensive policy to cover the rental will be charged about $2 a day, depending on their location and the type of car their policy covers. Buying insurance products from the car rental agency can cost, at minimum, $27 a day for the loss damage waiver coverage, depending on the rental agency and insurance product selected.

Myth: There’s not much you can do to lower your premium beyond the obvious, such as having a safe driving record and good credit.
Reality: There are other ways to reduce your premium. For example, you can have your vehicle identification number etched on your windshield and car windows. VIN etching makes it difficult for a thief to profit from stealing a car, and it also makes it difficult to dispose of the car after stealing it. Many police departments offer free VIN etching, or you can buy a VIN etching kit for about $25 and do it yourself. A number of insurance companies offer a discount or waive your deductibles if your car is VIN etched. To learn about other discounts, call your carrier and ask if there are any you’ve missed.

—Additional reporting by Sheiresa Ngo

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