Have you been in that situation when picking up a vehicle and the agent is talking up a storm about auto insurance? It seems you risk falling off a financial cliff and smashing into a million pieces unless you upgrade to the damage waiver plan offered by the car rental companies. Well don’t fall for it. No matter what your friendly and apparently helpful agent may tell you, the world will not end if you have an accident in a rental vehicle. Let’s start with the situation as seen by the car rental companies. They have cover on their fleets against all the loss and damage you could ever inflict on one of their vehicles. Because all the large companies have very large fleets, the actual cost per vehicle is actually quite small. So no matter whether you’re involved in a collision or someone steals the vehicle from outside the motel where you’re staying, the fleet insurance policy will pay for repairs or replacement. This leaves two key issues.

The first is liability cover. In all but three states, it’s mandatory to carry minimum amounts of cover against third party claims. The car rental companies therefore usually include the legal minimum as standard in the cost of the rent. Even if this were not the case, the majority of auto insurance policies give you liability cover when you drive a vehicle belonging to someone else with that person’s consent. So if you have a vehicle at home and it’s insured, the odds are you will be insured when you drive a rental vehicle. Check your own policy first before paying any for any additional cover. Then there’s your credit card. Most credit cards pay for collision insurance in a rental vehicle.

The second is the question of any medical expenses should you be injured while driving. If you have health insurance through your job or pay privately, there’s no need to worry. But if you have no cover, you have to decide whether to risk driving without medical expenses covered. Several hundred thousand people are injured on the roads every year. It’s your decision.