Your personal auto insurance, including all limits and deductibles, extends to almost any rental car you drive. That means, if you carry comprehensive and collision coverage on your daily ride, you’ll be protected against physical damage to your rental car. Your liability coverage also applies when you get behind the wheel of a rented vehicle.
Do you need rental car insurance?
If you’ve ever rented a car, then you’ve likely been pressured to purchase rental car insurance. When it comes to making an informed decision on insurance for rental cars, the more you know about your personal auto policy, the better. In most cases, rental car insurance overlaps with your personal auto policy and you probably don’t want to pay for duplicate coverage.
Rental car coverages you may already have on your auto or home policy:
Liability: Since liability insurance is required in nearly every state, your personal auto insurance already protects you against any damage or injuries you cause while driving a rental car, up to the limits of your policy.
Loss-damage waiver: If your rental car is stolen, vandalized or damaged in an accident, a loss-damage waiver means you won’t be held responsible by the rental car company. While the waiver is relatively inexpensive, you’re already covered for physical damage to your rental car if you carry comprehensive and collision coverage on your auto policy. Comprehensive protects against events out of your control, like theft, weather-related issues and hitting an animal. Collision covers damage from accidents with another vehicle or object.
Personal accident insurance: Personal accident coverage protects against injuries to you and passengers while driving your rental car. However, if you have medical payments coverage or personal injury protection (PIP) on your auto policy, you’re likely covered for medical bills resulting from an auto accident. Additionally, if you have health insurance, you may want to pass on paying for personal accident coverage.
Personal effects coverage: Generally inexpensive and available from most rental car companies, personal effects coverage covers personal items stolen from a rental car. However, your belongings are already covered under your personal property insurance on your homeowners, condo, or renters policy—even while traveling away from home in a rental car.
Reasons to add rental car insurance
Although rental car coverage invariably overlaps with your existing home or auto insurance, here are a few instances when adding rental car insurance could be beneficial:
- Deductibles may not apply with rental car insurance: If you have a high deductible on your personal auto policy, you could pay much less or nothing out of pocket on a rental car insurance claim.
- You can avoid claims against your personal car insurance: If you have a claim, you can file it against the rental car insurance and not your own to help avoid a potential rate increase.
- You have no coverage on your personal auto policy: For example, if you don’t have comprehensive or collision coverage on your personal auto policy, you could protect against damage to your rental car by adding the loss damage waiver.
- You can temporarily increase your coverage limits: You may only carry the state minimum for liability coverage on your personal auto policy or maybe you aren’t carrying enough coverage for your own peace of mind while driving a rental car. Adding additional liability from the rental company means greater protection if you’re at-fault in an accident.
Do you need car insurance to rent a car?
If you can’t provide proof of auto insurance, the rental car company will usually require you to buy insurance from them. Keep in mind, if you’re using a credit card to pay for your rental car, your credit card company may offer rental car insurance as a benefit of being a cardholder.
Do you need rental car reimbursement coverage?
Rental car reimbursement is always an optional coverage but can be extra-important if you find yourself without a vehicle due to a covered accident. While your car is being repaired, will you have access to another vehicle? Can family members drive you to work or wherever else you need to go? If not, rental reimbursement is an affordable coverage that can guarantee you aren’t left without a ride.
How to get a rental car from an insurance claim
Most insurance companies offer rental car reimbursement coverage which reimburses you for the cost of a rental car while your vehicle is being repaired due to a covered accident.
Credit: Progressive Insurance Co