Does My Car Insurance Cover Rental Cars?

does car insurance cover rental cars

If you have ever rented a car for a business trip or family vacation, you know the drill: you pick out the car you want, select the terms, and then, you decide if you want to purchase car insurance through the rental company.

On the surface, the right choice is to say yes. The last thing you want is to get into an accident and be responsible for the damages.

However, your current car insurance policy might already provide you with the coverage you need.

So, how exactly does this work? Let’s dive into the details and find out if your car insurance covers rental cars.

 

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Types of Insurance Offered by Rental Car Companies

 

Rental car providers allow you to choose from a few different policies. Some types you are likely to encounter are:med pay is considered no-fault

  1. Loss/collision damage waiver: This covers you should the rental be stolen, harmed in a collision, or damaged through an act of vandalism.
  2. Liability coverage: With this option, you are covered in the event that you damage other cars or property with the vehicle. This includes the medical expenses of those in other cars if you are at fault in causing an accident.
  3. Personal accident coverage: This policy covers the medical bills of everyone in the vehicle resulting from any accidents involving it.
  4. Personal items insurance: This covers any personal items that are stolen from or damaged in your rental car.

 

The Cost of Rental Car Insurance

 

The exact cost will vary based on the policies or package you choose, the rental car insurance company, and even your age. In general, your policy will fall somewhere at or below $40 per day, though the rates can be significantly higher. Even at the low end, this adds up should you need to rent a vehicle for longer than a week.

 

Using Your Car Insurance to Cover a Rental

 

If you already own and insure a vehicle, there is a good chance your policy will overlap with those the rental company offers you.

Take liability insurance, for example. If you cause an accident with the rented vehicle, your liability insurance should still payout according to your policy terms for injuries and damages to others and their property.

To decide whether or not the additional policy is worth it, ask yourself the following questions.

Is your current liability coverage enough?
Since nearly every state requires drivers to have a liability policy, your coverage likely includes this. The question is if it is enough. Depending on where you will be driving the rental car, the law might require more liability coverage than your home state. If you carry the minimum in liability coverage required by your state, this supplemental insurance might be necessary.
Does your policy offer full coverage?
Or stated another way, is there comprehensive coverage and collision coverage on your insurance plan? Collision insurance covers damage related to situations that occur when you are driving. Comprehensive insurance extends to damages that occur off the road, such as theft or hail damage.

If you have full coverage, call your insurance provider to verify if they extend this to rental cars. If they do not, you will need to opt for the loss damage waiver. Even if you do have full coverage, there is a catch to keep in mind: the rental car company might bill you for loss of use, and your primary insurance policy won’t cover that.

Are you covered by PIP, Medpay, or health insurance?
The rental company will offer you the option of taking out personal accident insurance to cover medical costs for you and your passengers. If you have health insurance, you likely can decline this. Should your primary car insurance policy offer personal injury protection (PIP) or medical payments (Medpay), skipping this policy is likely fine.

The same is true if everyone has health insurance Both PIP and Medpay will cover you if you are injured while driving your rental car. PIP will also cover immediate family and others insured under your policy while Medpay strictly covers you. If you will be driving with anyone not in your immediate family or who is not insured under the same policy, consider taking out the personal accident insurance the rental company offers.

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These policies cover your personal items. The rental car company will give you the option of purchasing insurance that covers any items stolen from or damaged in the vehicle. If you do not have homeowner’s or renter’s insurance, you will need this. Even if you have a comprehensive policy on your own car, this will not cover personal items taken from or harmed in the rental car.
Do you have a credit card that covers rental car insurance?
Some credit card companies will offer rental insurance when you pay for the rental using their card. To find out if they offer this coverage, just call their customer service number and ask the following questions:

1. Do you cover insurance for rental vehicles?
2. If so, how do I get this coverage through you?
3. Will this be primary or secondary coverage?
4. What items are included in the coverage?
5. How long does the coverage last?

 

It is important that you get answers to all of these questions, as coverage varies between credit card companies. Do your research, and if you have cards from multiple companies, call all of them and compare your options.

 

When is Rental Company Insurance the Right Choice?

 

While it won’t always be best, sometimes it is safest to purchase at least some coverage from the rental car provider. Signs you should take out a policy through the rental company include:

  1. Not owning a car or not having a current car insurance policy
  2. Having an active policy that has insufficient coverage
  3. Wanting the security additional coverage brings

The key is going into the decision fully understanding the coverage you already have and how additional policies will or won’t benefit you. While you want to be fully insured, you also don’t want to pay for the same coverage twice.

 

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Frequently asked Questions

Doesn’t my car insurance automatically cover a rental car?

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Not always. Some insurance companies will only cover the rental car if your insured vehicle is not being driven or is under repair. In most cases the coverage on the rental will be subject to the limits and coverages on your car insurance policy.

Should I buy the rental car insurance if I don’t have full coverage?

does car insurance cover rental cars

Typically, you won’t have a choice in the matter. While you are completing the rental agreement, the rental agent will need proof that you have comp and collision on your car insurance policy if you elect to forgo the rental car insurance.

Are there some hidden charges I might be subject to when I rent a car?

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Depending on your car insurance company, the rental company’s loss of use is probably not covered under your car insurance policy. This means that if you have an accident, the car will certainly need to be replaced or repaired, but the rental company will also lose the revenue that vehicle would produce while it is under repair and would likely come to you to be reimbursed if your insurance company doesn’t cover the loss of revenue.