Does your car insurance cover rental cars? Find out if your personal auto insurance policy covers a rental car and see when it’s wise to consider rental car insurance.
You are ready to go on a vacation with your family. You are now standing in a queue at a rental car counter to book a rental car. Suddenly you are handed over a rental car contract that has a lot of insurance options enough to confuse you. This may make you think you should have invested more time researching rental car insurance instead of packing your luggage.
It’s natural to get confused as rental car insurance is not something you deal on a daily basis.
So here are the answers to all the questions about rental car insurance that you may have in your mind.
What Is Rental Car Insurance?
First of all, don’t confuse it with the rental reimbursement coverage that provides reimbursement for a rental car in case your car is being repaired due to any loss or accident covered under your personal auto policy.
Rental car insurance is a policy that covers your rental car when you rent a vehicle from a rental car company. When you rent a car from any rental car company, you will be asked whether you want insurance on your rental vehicle or if you want to waive it off.
Do You Need Rental Car Insurance?
The short answer is – It depends!
There is no straightforward answer to this question as your car insurance may or may not provide coverage on rental cars.
However, in most cases, your auto policy may cover the rental car. But if it doesn’t, you may need to buy supplemental insurance from your rental car company that can increase the cost of your rental car from $15 to $30 per day.
So you need to choose your option carefully. You need to make sure your rental vehicle is fully protected without spending more than required.
How To Check If My Auto Insurance Covers Rental Car?
Before completing the paperwork with your rental car company, ask your insurance agent if your rental car is covered under your personal auto policy.
If your auto policy doesn’t have liability, collision, or comprehensive coverage, then most likely your insurance policy will not cover your rental car if it gets into an accident.
Also, if your personal auto policy doesn’t have coverage for business use, then most likely, your rental car will also not get coverage if you are planning to use it for business purposes.
Rental Car Insurance: What Does It Cover?
Whatever coverage you choose for your personal vehicle normally also applies to your rental car. Here are the coverages your rental company will present you instead of your personal car insurance coverages.
- Liability Coverage – This is the most basic coverage that protects you if you cause any harm to any individual or someone’s property from your rental car. Your personal auto policy’s liability coverage will most likely cover your rental car too. So you can skip this coverage.
- Collision Damage Waiver – This is not something related to insurance. It is a waiver that makes your rental car company responsible for any financial loss in case the vehicle is stolen or damaged. Your collision and comprehensive coverage will most likely cover this but you may need it in case you are renting an expensive car to make sure its cash value is covered.
- Personal Effects Coverage – This covers your personal belongings in case they get stolen from your rental car. Generally, your homeowners, renters, or condo insurance policy covers you for this. So you can decline this coverage but be sure of it by reading your policy’s terms and conditions before declining.
- Personal Accident Insurance – This covers your medical expenses if you sustain bodily injuries due to an accident. If you have personal injury protection in your auto insurance policy and better health insurance coverage, this coverage might not be required.
When Should You Purchase Rental Car Insurance Even If You Are Covered?
Here are some instances when you might need to buy insurance from your rental car company even if your personal policies already cover you.
- If you only have liability insurance.
- If you only have a minimum amount of liability insurance required by the state.
- If you have set a high deductible in your personal auto policy.
- If you are considered a risky driver by insurers and you don’t want to raise the premiums of your personal policy.
- If you have set very low limits on your comprehensive and collision coverage.
Which Insurance Companies Cover Rental Cars?
Most of the major car insurance providers offer rental car coverage. Here are some prominent names.
- State Farm
- Liberty Mutual
- American Family
Should You Buy Rental Car Insurance Even If You Are Already Covered?
It may be a good option to get additional rental car insurance coverage from your rental car company even if you are covered by your personal auto insurance policy.
If you are going on a vacation in your rental car in an unfamiliar area, the chances of things going wrong is much more compared to the places you are familiar with.
So there is a chance that your personal auto policy might not be enough to cover you fully in such cases. It will be wise to check your auto policy thoroughly before denying rental car coverage.