Rental Car Insurance

Does your car insurance policy cover rental cars?

Your own auto insurance policy covers nearly every rental automobile you drive, including all limitations and deductibles. That is, if you have comprehensive and collision coverage on your personal vehicle, you will be insured against physical damage to your rental automobile. When you get behind the wheel of a leased car, your liability coverage applies as well.

Is rental automobile insurance required?

Most rental vehicle insurance policies overlap with your existing auto policy, so you won't have to pay for duplicate coverage. However, there are several circumstances in which it is prudent to have rental insurance. Before you sign up for rental insurance, be sure you understand what your own vehicle policy covers. This information is available in your policy documents, often online, or can be obtained by calling your agent or insurer.

Choosing between rental vehicle insurance and rental car reimbursement

Rental vehicle insurance, which is provided by the business from whom you rent the automobile (ex. Thrifty, Avis, Enterprise, etc.), covers you and the rental car you are driving at the time. Rental car reimbursement reimburses you for the expense of a rental automobile while your vehicle is being repaired following a covered accident. You must add rental vehicle reimbursement coverage to your personal policy if you want to get paid for the cost of your rental automobile.

You may already have the following rental vehicle insurance coverages on your auto or home policy:

  • Liability: Because almost every state requires liability insurance, your personal auto policy already covers you for any damage or injury you cause while driving a rental automobile, subject to the limits of your policy.
     

  • Loss-damage waiver: If your rental automobile is stolen, vandalized, or destroyed in an accident, a loss-damage waiver ensures the rental car company will not hold you liable. Some rental car providers may refer to this as a collision damage waiver. While the waiver is very modest, if you have comprehensive and collision coverage on your vehicle policy, you are already protected for physical damage to your rental car. Comprehensive insurance protects you against damage caused by situations beyond your control, such as theft, fire, vandalism, weather-related difficulties, and hitting an animal. Collision insurance covers damage caused by collisions with another vehicle or item.
     

  • Personal effects coverage: Personal effects coverage, which is often cheap and available from most rental vehicle companies, protects personal goods lost from a rental automobile. Your possessions, on the other hand, are already protected by your personal property insurance on your homeowners, condo, or renters policy – even if you are going away from home in a rental car.

When should you consider purchasing rental car insurance?

While rental car coverage generally overlaps with your existing house or auto insurance, there are a few situations when additional rental car insurance may be advantageous:

  • Deductibles may not be applicable while renting a car: If you have a large deductible on your personal auto policy, you may have to pay very little or nothing out of pocket for a rental car insurance claim.
     

  • Avoid filing claims against your personal vehicle insurance: If you have a claim, you may file it against the rental car insurance, which can save you money on your own policy because the rate won't go up.
     

  • Your own auto policy provides no coverage: If your personal auto policy does not include comprehensive or collision coverage, adding the loss-damage waiver might protect you from damage to your rental car.
     

  • You can temporarily raise your coverage limitations by doing the following: You could just have the state minimal liability coverage on your personal auto policy, or you might not have adequate car insurance coverage for your own peace of mind when driving a rental car. Adding additional responsibility from the rental business means you'll be better protected if you cause an accident.

 

Is rental car insurance provided by your credit card?

If you use your credit card to pay for the automobile rental, certain businesses will give insurance coverage. Check with your credit card provider to see what they'll cover, as each has its own set of regulations and restrictions.

 

Is rental reimbursement insurance necessary?

Rental car reimbursement is usually an optional policy, however it might be very useful if you are unable to drive due to a covered accident. Will you have access to another vehicle while your automobile is being repaired? Can you rely on family members to drive you to work or wherever you need to go? If not, rental reimbursement is a low-cost insurance option that can ensure you don't get stuck without a ride.

 

How to obtain a rental automobile as a result of an insurance claim

Most insurance companies provide rental car reimbursement coverage, which pays for the cost of a rental car while your vehicle is being repaired as a result of a covered accident. You're usually insured for $30-$60 each day for up to a month.