Should I get rental car insurance? Am I already covered?

• Author: Laborsky, Jeff
• Position: ADVICE: INSURANCE

WE'VE ALL BEEN there--weary business travelers eager to reach our final destination without additional hassle when a rental car agent tries to get us to buy liability and collision damage coverage. Thankfully, for savvy business travelers, a preferred access kiosk lets us bypass the long lines and go directly to our cars, and, in the process, avoid the insurance sales pitch at the counter.

Have you ever found yourself asking: Just what is covered? Do I really need it? Won't my company's insurance policy pick up the liability if I get in an accident? Don't I have some coverage from my credit card company?"

Just what is covered and do I really need it? According to the Insurance Information Institute, for between $10 and $20 per day, the collision damage waiver offered by your rental car company will cover theft or damage to the rented vehicle. For $9 to $14 a day, your rental car company will provide $1 million in excess liability coverage above a given state's required minimum. Both of these policies, and especially the excess liability coverage (given large verdicts in some districts) may be particularly important for business travelers who do not own their own personal vehicle and do not have a personal auto policy.

Your personal auto insurance is deemed "primary" by insurance companies by convention, even when you are traveling on business. This means that your personal car insurance policy will respond first until its limits are used up. Advice: Use your company-issued credit card, not your personal credit card.

Some companies elect to make their business auto policies "primary" for liability coverage, covering employees traveling by car (owned, borrowed or rented) on company business. Advice: Ask your agent if you have elected business auto policy as "primary" for employees. While you're at it, you might ask if you have "Employee as Insured" for the occasion when an employee uses his or her own vehicle on company business. This add-on will provide primary coverage to employees traveling on company business in their own vehicles.

Watch out for the "loss of use" trap. Most business auto policies provide minimal coverage for a rental...