Rental-Car Insurance

My wife and I both are retired and currently living in Italy. Every time we visit the States—at least twice a year—we rent a car, and the rental car insurance is almost as much as the rental car cost. Is there any way to maintain U.S. auto insurance that will be less than the rental car insurance cost?

–John

Middletown, Pa.

Hi, John,

I spoke with couple of insurance agents, who said that the type of policy you are looking for is called a "named non-owner" policy (meaning you have a policy in your name, but do not own a car). Policies are issued in six-month increments, as with other types of auto insurance.

Though it is impossible to know the exact cost of such a policy since it would depend on your age, driving record, and other factors, one agent estimated that it would be roughly 30 to 50 percent less than a full policy. However, an important caveat to remember is that a non-owner policy would include liability coverage only, not comprehensive and collision, which would only apply if you owned a car. So each time you rented a car, you’d still have to buy comprehensive and collision coverage at the rental car counter. With this in mind, I’m willing to bet that getting a non-owner policy would not be a cost-effective option for you.

Another idea would be to investigate getting insurance through your credit card company. But many cards only offer coverage that is secondary to a personal existing auto policy, which would not be helpful if you don’t have one. What you'd want is a card that offers primary coverage. Some American Express cards, for example, will give you up to $100,000 of primary coverage for damage or theft of a rental car, up to $100,000 for accidental death or dismemberment, plus medical and personal property coverage for you and your passenger for only $24.95 per trip if you book the car rental with their card. The coverage applies for up to 42 consecutive days in most states. Compared to around $140 a week insurance from rental car companies, this is quite a deal.

If you have a credit card, call the toll-free number on the back to find out what if any coverage it offers and what the restrictions and conditions are. If your card doesn’t offer primary coverage, consider upgrading your card or getting a different card that does have it.