Does my auto insurance cover rental cars?
In most cases, your existing auto insurance will cover a rental car up to the same limits. Most of us have stood at the rental car counter trying to decide if we should add your insurance to our rental car. After all, we’re already paying a pretty penny for car insurance, right? And renting a car is not cheap either. and yet… we are torn because we are not sure if we need the additional insurance or not.
However, whether or not you will be covered depends on the details of your policy. Before purchasing auto rental insurance reimbursement coverage, check your auto insurance policy. If you have liability insurance that extends to rental cars, see how much you take with you. Is it enough to pay for property damage and medical costs if you have an accident? If so, you probably don’t need liability insurance for a rental.
Clearly, it is imperative to have some form of insurance for your rental. but do you really need to buy those expensive add-ons at the service counter? Let’s take a look at some reasons why you may not need to purchase separate liability insurance for your rental, and some instances where it might help.
four rental car insurance options
When you rent a vehicle, the person at the rental counter will ask if you want to purchase rental car insurance. You can also buy rental car insurance online if you make your reservation online. There are generally four types of insurance available, and you may need all four or none, depending on your circumstances.
Most car rental companies offer collision damage waiver, liability coverage, personal accident insurance, and personal effects coverage. rental car insurance can be expensive. rates are charged per day and may add up for long term rentals.
Let’s take a look at these four types of insurance and decide if we need them.
1. rental vehicle collision damage waiver
what it is: A collision damage waiver protects you if the rental car is stolen or damaged and covers towing and loss of use charges when the vehicle is being repaired. it usually costs between $10 and $30 per day. If you’re in the United States, you won’t have to pay a deductible for coverage. however, some other countries will require you to pay a deductible for coverage to take effect. It is very similar to collision and comprehensive car insurance.
The Verdict: If you already have collision auto insurance and comprehensive auto insurance, then you don’t need to purchase collision damage waiver. your own insurance should cover you and the rental car. if you pay with a major credit card, you probably have even more protection. if you do not have these coverages, you must purchase this exemption.
2. rental car liability coverage
what it is: Rental car insurance liability coverage protects you from lawsuits if you’re in an accident. for example, this could be triggered if you cause an accident and someone sues you for your medical bills. this does not provide any protection for damage to you, your passengers or the car. expect it to cost around $10-$16 per day.
The Verdict: Most states regulate minimum liability insurance, so every rental should already include this standard coverage. you only need to pay for this if you want additional coverage. Think of it like bodily injury liability and property damage liability, but only for rental vehicles.
3. personal accident insurance for rentals
what it is: This coverage pays for medical expenses due to an accident. It covers you or anyone in your vehicle at the time of the accident. it can cost anywhere from $3 to $9 a day and is more similar to personal injury protection and medical payments insurance, which, in most cases, are standard types of auto insurance.
the verdict: if you already have pip/medpay with your insurance policy, or if you have health insurance, you probably don’t need this coverage. however, you should check with your health insurance provider to ensure that you will be covered for injuries associated with a car accident involving your rental vehicle.
4. personal effects coverage
what it is: if you are on vacation in a tourist area, you have to be especially careful with thieves and muggers. Personal effects coverage protects items stored in the rental car. this could include your luggage, clothing, or electronic devices. just be aware that expensive electronics may have a coverage limit or exclusion, which means you may not receive a full refund. this costs $1-$6 a day and is more like the coverage you get from homeowners or renters insurance.
The Verdict: If you have homeowners insurance or renters insurance, your personal belongings should be covered. If you don’t have any of these coverages and expect to leave valuables in your rental car, it may be worth purchasing this insurance.
I don’t have car insurance, can I rent a car?
yes, you can. If you don’t own a car, so you don’t need car insurance, you can rent a car. You won’t have as much protection as you would with a personal auto insurance policy. In these cases, we recommend choosing car rental insurance. the car will automatically come with the local minimum coverage required by law. however, that may not be enough if you have a serious accident. And if you’re traveling out of the country, the laws can vary wildly, so you may or may not be protected.
If you don’t own a car and plan to rent or borrow a vehicle on a regular basis, you should look into non-owners car insurance. One of the benefits of this insurance is that it is usually cheaper than paying rental companies’ insurance rates if you are a frequent car renter.
Liability insurance is typically the only insurance coverage required in each state, so most rental cars probably won’t include comprehensive or collision insurance unless you add them. Without your own policy to protect you, you risk paying huge repair bills, so adding extra protection here is a great idea.
Do I need rental car insurance if I have health insurance?
not if you travel to the interior of the country. In the United States, most health insurance policies will cover your injuries in a car accident without question. even policies with strict network requirements must cover emergency room visits or medically necessary hospital stays at the in-network rate. This means that if you need life-saving care, you won’t have to file for bankruptcy to get it (although you may need to transfer to an in-network hospital as soon as medically feasible).
however, this may change if you are out of the country. That’s why it’s important to read the terms of your health insurance carefully to see what is and isn’t covered. If your coverage is strict about receiving out-of-network care or limits liability for bills accumulated outside the country, adding additional personal accident insurance can’t hurt.
While health insurance may provide you with medical protection during an accident, it does not cover any damage to your vehicle, damage to other vehicles, or other people’s medical bills. so you may need to add this coverage based on the other factors we’ve been discussing.
Do I need rental car insurance if I have homeowners or renters insurance?
Generally, you will not need personal effects coverage. A homeowner’s insurance policy can also protect you when driving a rental car. your policy may cover your belongings even when they are not in the home. if so, you do not need personal effects coverage.
For example, let’s say you bring an iPad, a designer bag, and your suitcase full of clothes in your car. If someone breaks in and takes these things, the insurance will reimburse you for your losses. there are just a couple of caveats.
First, cameras and high-end electronics aren’t usually covered unless you hire a specific vehicle for them. Second, the coverage is usually for personal purposes only. If you’re on a business trip, you may need to seek help from your employer’s insurance.
As with health insurance, this type of coverage does not cover damage to anyone’s vehicle or medical bills. make sure you have enough coverage in those areas before you set out on your trip.
Do I need rental car insurance if I have traveler’s insurance?
probably not. Travel insurance is a great way to make your next trip go smoothly, no matter what. can provide trip cancellation or delay reimbursement, overseas health insurance, and lost luggage reimbursement. it’s basically a combination of health and home insurance, but only for the duration of your vacation.
Your traveler’s insurance policy can also replace rental car insurance. can include collision coverage for rental cars and is usually cheaper than what you’ll pay a rental company. always read the fine print on any traveler’s insurance policy before buying. As with rental car insurance, you may have enough coverage from your existing policies to protect you on the road.
Do I need rental car insurance if I have credit card benefits?
Most major credit cards will provide coverage when you use that card to pay for your rental car. Many credit cards offer collision protection that can cover you if you are in an accident. This insurance generally requires you to exhaust all other forms of insurance first, but it may be your primary coverage if you have no other insurance.
Just be sure to decline the collision damage waiver offered by the rental car company. if you don’t, this policy will cancel your credit card coverage, meaning they won’t pay anything if you have an accident.
Don’t forget that there is usually a time limit for a credit card to cover a car rental. Some cards set a limit as low as 15 days, which might not be enough if you need long-term rental car insurance.
Curious about what exactly a credit card covers? Here’s a look at American Express Platinum Card coverage:
- car rental damage and theft up to $75,000
- accidental death or dismemberment up to $200,000 per cardholder and $20,000 per passenger, up to a total of $300,000 per accident
- accidental injury coverage up to $5,000 per rental car claimant
- personal property rental car coverage up to $1,000 per claimant for a total of $2,000 per occurrence
- additionally, your card may cover towing costs
As you can see, this coverage is quite comprehensive and should offer you complete protection if you are involved in an accident.
should i get additional coverage?
still want to know, “should I insure my rental car?” it all really depends on how much coverage you currently have or don’t have.
If you don’t have comprehensive and collision coverage, you should consider getting the collision damage waiver. Also, if you don’t have personal injury protection or health insurance, you’ll need personal accident insurance. You may also consider personal effects coverage if you don’t have protection.
Some people are comfortable with lesser amounts of coverage, while others prefer to have a protective blanket. At the end of the day, it’s up to you to decide how covered you’d like to be.
find affordable car insurance online today
Review your auto insurance policies before purchasing car rental insurance. you probably don’t need it. if you do, buy the type of policy you need to protect your financial interests when you’re away.
Still not sure if insurance will cover your rental car? our insurance experts at freeway insurance can help! Get a free auto insurance quote today online, by phone, or at one of our offices near you.