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Comment by vasco | Hacker News Reader

I rent cars frequently and never take their predatory extra insurance. It can frequently add 50% to the cost of the rental, and in about 50 rentals I've only had to pay damage out of pocket 3 times (all three because of parking bumps while the car was parked over night and the other person just left without leaving a note or anything). The out of pocket costs easily come below the total amount of insurance fees I'd have paid. Plus you always have a maximum you'd have to pay out of pocket that is not even close to the total cost of the vehicle, usually under €1.5k, and with minor bumps from parking or something like that it won't ever get even close to the max, sometimes it's even under what the insurance would've cost in the first place. I think it makes no sense and the "piece of mind" is overrated, even if you drive in to return a car with minor damage they'll just charge your card, it's not like you have any extra work or worries to deal with.

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> out of pocket costs easily come below the total amount of insurance fees I'd have paid

Most major credit cards come with a good amount of rental car insurance.

2 of the 4 credit cards in my wallet have greatly restricted the coverage they provide for rental cars in the last 2 years. Check your cards to be sure you're still covered.

Almost all credit cards I've seen only provide secondary insurance, which means that if you already have normal car insurance, the credit card insurance only kicks in after that is exhausted.

One of the few cards that provides primary rental car insurance is the Chase United Explorer card. If you rent cars regularly it can be worth the annual fee for that feature alone.

(Assuming you have car insurance to begin with -- if you don't, then there is no difference between primary and secondary coverage)

If you're not otherwise covered, I think it makes sense to accept their liability insurance, since that could involve significant sums. But yes, most should decline damage waivers etc.

I guess that is different between the EU and US:

Here in Europe, for almost all car rentals the maximum you will pay even if you rear end another car is around €1500 (may be higher depending on the class of the car). However as I understand, they are well within their rights to charge you that even for a tiny mark on the bumper.

It is mandatory for all vehicles (rental or not) to have insurance that covers damages to the other party in the event of a RTI - this is on the responsibility of the vehicle owner and covers anyone authorised to drive it. We don't have crazy medical bills so this is usually quite cheap (I pay €120/year). This covers everything, so if you hit a brand new Rolls Royce which ends up being totalled you aren't on the line to pay anything extra. Of course you will need to pay to fix your car.

There is also comprehensive insurance that covers damages to your own vehicle. This takes into account your driving experience and value of your car, so can range from a few hundred to thousands (I pay €600/year for a 12yo Toyota). If I decide one day I feel like driving into a tree, I just need to pay a €100 access fee and the insurance company will fix my car.

The €1500 is the equivalent of that access fee. Paying for the extra rental insurance reduces how much of that €1500 you need to pay (well, I think you still need to pay, but can claim it back). There is also third party car rental insurance providing the same cover, which last time I took it, was something like €50/year.

You can buy car rental excess insurance from another insurer, much more reasonably priced than the rental companies' extra insurance.

My perception is that the rental companies are incredibly vigilant about minuscule scratches - my concern would be being charged €hundreds for a tiny scratch caused by a chipped-up stone. I wonder if the companies providing excess insurance are able to negotiate more robustly with the rental companies than the typical private individual?

Probably yes. It's the same issue as class-action suits. If they want $200 for a scratch in the paint that I don't think is my fault, I can either just pay them, or I can hire a lawyer to bicker about $200. It's not worth it as an individual.

As an insurance company, I might handle thousands of cases like that a year. It makes financial sense to set up a way to efficiently get rid of those, and once I have that set up, it stops making sense for the car rental place to try to get me to pay. They know I'm just going to sue them. They probably still try, and then voluntarily drop it as soon as they see a response from another insurance company.

Plus I strongly suspect part of the reason they're so stringent about scratches is to push people into paying for the insurance. If someone is already using another insurance company, they're going to be harder to convince to use your insurance than someone who simply has no rental insurance.

Even if they charge you €200 for a scratch that didn't do, insurance is usually at least €50 a day, so you'd need a scratch every 4 days or more to justify it.

Conversely I usually get the insurance when I rent U-Hauls. It's pretty cheap and I feel like it's pretty tough driving a big, bulky truck with poor visibility and a heavy load. A Camry? No thanks, I'll just use my personal auto insurance / credit card insurance.

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