If you’ve ever rented a car, you’ve likely received an aggressive sales pitch when it was time to pick up the vehicle. But it wasn’t for a gas or mileage add-on. Instead, the customer service representative strongly recommended that you purchase supplemental auto insurance coverage.
But is it necessary, or can you use your own policy for protection? It depends on the specifics of your policy and your coverage. Here’s what to know about auto insurance as it relates to rental cars.
Understanding Rental Car Insurance
Rental car insurance can protect you from costs if you’re involved in an accident or the rental car is damaged or stolen. You can also purchase a Loss Damage Waiver (LDW), which isn’t technically insurance but waives your financial responsibility if the vehicle is damaged, vandalized or stolen. Plus, there’s supplemental liability insurance (SLI) that offers liability coverage beyond your policy limits.
More on the specifics of rental car insurance will be provided shortly.
Does Your Auto Insurance Cover Rental Cars?
Most personal auto insurance policies extend coverage to rental vehicles. This means the same protection you have for your car, like liability and collision coverage, could apply to a rental car.
How to Check Your Current Auto Insurance Policy
Below is a breakdown of how to confirm that you carry adequate coverage to protect you when renting a vehicle.
Reviewing Your Insurance Documents
Here’s what to look for when reviewing your policy documents:
- Liability Coverage: If your policy includes liability coverage, it typically covers rental cars. This protects you if you cause damage to others or their property while driving the rental.
- Collision Coverage: If your car is insured for collision, this coverage usually extends to rental cars. It helps pay for damage to the rental vehicle if you are at fault in an accident.
- Comprehensive Coverage: This coverage protects against non-collision-related damage, like theft or natural disasters. Check your policy to see if it extends to rentals.
Contacting Your Insurance Provider
If you’re unsure about your coverage, contact your insurance company directly. Call the customer service department or send an email with your policy number for reference. Be sure to inquire specifically about rental car coverage, along with the deductibles and additional costs that may apply and the process to follow should you need to file a claim.
Rental Car Scenarios
Renting a Car for Personal Use
Your existing auto insurance policy might cover renting a car for personal errands or vacations. Often, your personal liability and collision coverage extend to rental vehicles. Still, it’s best to check with your insurer to confirm this.
You might also consider a loss damage waiver for added protection. This waives your financial responsibility for damage or theft of the rental car.
Renting a Car for Business Use
Your personal auto insurance policy might not cover business rentals, so you’ll likely need additional coverage. That’s unless you carry a business policy.
Contact your employer to see if they offer insurance that covers rental cars during business trips. If not, you’ll need to purchase coverage directly from the rental agency to protect yourself.
International Car Rentals
Renting a car abroad likely means you’re not covered unless you purchase supplemental coverage. Look into options through your insurance or the rental car company. You want to ensure the insurance you buy meets the legal requirements of the country you’re visiting.
Additional Insurance Options for Rental Cars
If your policy is inadequate or you prefer an added layer of protection, here’s what you need to know about insurance options available through rental car companies. You may also be eligible for coverage through your credit card company.
Rental Car Company Insurance
Most rental car companies offer these coverages to drivers:
- Collision Damage Waiver (CDW): It covers damages to the rental car.
- Liability Coverage: It protects against damages or injuries you may cause.
- Personal Accident Insurance: It provides medical coverage for injuries.
- Personal Effects Coverage: It protects personal items inside the rental.
Credit Card Rental Car Insurance
Some credit cards include rental car insurance as a perk. This insurance can cover damage or theft of the rental vehicle.
To activate this coverage, you typically need to pay for the rental with a card offering that benefit. Be sure to call your credit card company to confirm the details before moving forward.
Travel Insurance Rental Car Coverage
Travel insurance often covers more than just trip cancellations. It can also provide rental car coverage, including collision damage, theft protection, and even liability coverage in some cases.
Travel insurance may be beneficial if you’re renting a car as part of a bigger trip since it bundles with other travel protections. Always check the details to see what types of vehicles or damages are covered under the travel insurance policy.
Common Misunderstandings and Myths
Below are some common myths associated with rental cars and auto insurance.
Myth: Your Regular Auto Insurance Always Covers Rental Cars
Many believe their auto insurance automatically covers any rental car, but this isn’t always true. Coverage often depends on the type of policy you have. If your policy only includes liability, you may still be responsible for damage to the rental car or theft.
Check if your comprehensive and collision insurance extends to rentals.
Myth: Rental Car Company Insurance is Mandatory
Some renters think they must purchase rental car company insurance, which isn’t true in every case. If your personal policy or credit card provides adequate coverage, buying extra insurance could be unnecessary.
Research your current policy to determine if you’re already covered before paying for additional insurance.
Myth: Credit Card Coverage is Always Sufficient
Credit cards often include rental car coverage, but it’s not always comprehensive. Many cards cover theft or damage yet exclude coverage for injuries or personal items. Relying solely on your credit card’s insurance might leave you exposed in certain situations.
Carefully review your credit card benefits so you’ll know what’s covered.
Steps to Ensure Proper Coverage
Here’s how to decide if your personal policy is adequate or if you should purchase supplemental coverage.
Confirming Coverage with Your Insurer
As previously suggested, reach out to your auto insurance provider. Ask if your current policy extends to rental cars.
Confirm you have the same liability, collision, and comprehensive coverage for the rental car as you do for your own vehicle. It’s essential to discuss the policy’s specifics, including any limitations and deductibles.
Comparing with Rental Car Company Options
While comparing prices and benefits, consider if your existing policy provides the same protections. Purchasing additional insurance through the rental company could be redundant if you’re already covered. But if your policy lacks any coverage, purchasing from the rental company ensures complete protection during your rental period.
Evaluating Credit Card Benefits
Again, it’s worth checking the benefits offered by your credit card before renting a car. Many credit cards offer secondary rental car insurance when you use the card to pay for the rental.
This means the credit card coverage kicks in after your personal insurance is exhausted. Review the terms closely, as they can differ significantly between card issuers.
Review Your Car Insurance Options
You want to confirm the level of coverage, if any, extended to rental cars if you plan to use your own policy. If you find that it’s inadequate, consider shopping around for a different policy that better fits your needs. Experian offers a free auto insurance comparison tool that lets you view policies from other providers that can save you money in minutes. The tool is free to access, and signing up also means you can take advantage of other Experian credit-related resources at no extra cost.
FAQs About Rental Car Insurance
Your auto insurance often covers rental cars in the U.S. and Canada but may not extend beyond these regions. If you’re traveling internationally, check with your insurance provider about your policy’s specifics.
Some companies might offer endorsements or riders for additional coverage abroad. Alternatively, you might need to purchase an international car insurance policy separately.
If you’re in an accident with a rental car, prioritize safety first. Check for injuries and call emergency services if needed. Also, contact the rental company as soon as possible to inform them about the accident. They might send assistance or guide you on the next steps.
You also want to document the scene with photos and notes about the incident. Exchange information with the other driver, including contact details and insurance information.
Be sure to notify your insurance provider to discuss coverage and any potential claims. Keep all related documents, including police reports and repair estimates, for future reference.
Many credit cards offer rental car insurance benefits, specifically collision damage waivers. This coverage typically applies if you decline the rental agency’s collision coverage and use your card to pay for the rental.
Credit card coverage might not include liability or personal injury protection, though. These are often covered by your personal auto insurance. Contact your credit card issuer to learn more.
