Does My Car Insurance Cover Rental cars?
Does My Car Insurance Cover Rental Cars?
You’re on a summer trip with your family and the rental car salesman asks if you’d like to add insurance to your rental. You kindly decline and, three days later, get in an accident on your way to the beach. Will your car insurance be enough to cover the accident? Read on to learn how your insurance policy will work in a rental car and everything you need to know about rental car insurance.
Car rental salesman typically relies on the fact that you don’t know what your policy covers when it comes to rentals. But most car insurance policies will extend to a rental car being used for personal reasons in the case of an accident or theft. If your policy doesn’t cover damages to a rental or you don’t have personal insurance, there are still other rental car insurance options besides those the rental company offers.
Understanding your Policy
You might be thinking “does my insurance policy cover rental cars?” In order to know what your best options are, you need to understand what your insurance policy will cover first. Below is a breakdown of the most common policy types.
Liability insurance
This type of policy covers another person’s medical bills or property damage if you cause an accident. Liability insurance is required by most states, so you probably have at least liability on your policy.
Collision insurance
Collision policies cover repairs to your vehicle if it is damaged in an accident. This covers accidents with another vehicle or object such as a fence. Collision insurance is most likely required if you are leasing or financing your car.
Comprehensive insurance
This covers any other damages to your car caused by theft, weather, or other covered disasters. It does not cover any collision damage. This policy is also likely required by the lender if you are leasing or financing.
Homeowners/renters insurance
Your auto policy won’t cover any of your personal items that may be stolen from your car, but a homeowners or renters insurance will. There are many types of homeowners and renters insurance policies, so make sure you know what your policy includes.
These policies will most likely extend to your rental car, but it’s always important to check your specific policy. Deductibles will still apply to an insurance claim made on a rental car.
Understanding Rental Car Insurance Options
Before making the choice to insure your rental car through the rental company, make sure you understand what each of their policies covers in comparison with traditional insurance.
Liability coverage
Just like normal liability coverage, rental car liability insurance is meant to cover the other person involved in an accident should one occur. If you have liability coverage, you won’t need the rental company’s coverage.
Loss Damage Waiver
Sometimes known as a CDW or LDW, it technically isn’t insurance. An LDW covers damages to the car while typically excluding any damages done from speeding or offroading. Comprehensive or collision insurance would cover you in this case, so the LDW wouldn’t be necessary.
What won’t be covered by your insurance is a “loss of use” charge. Some companies will charge you for not being able to use the car while it’s being repaired from the damages you caused. This will have to come out of your own pocket as no policies cover it.
Personal effects coverage
This covers your personal items if they are stolen out of the rental car. If you have a renters or homeowners policy with “off-premise” coverage, your belongings will be covered without the rental car insurance coverage.
Personal accident coverage
Personal accident coverage covers medical bills for you and any passengers in your car while there is a wreck. Your personal health insurance policy will cover any medical bills you have after an accident. PIP, or personal injury protection, is also required on your policy in some states and is meant for paying medical bills in the case of an accident.
Using a Credit Card for Rental Car Insurance Coverage
If you are using a credit card to pay for the rental car, there may be insurance provided through them. Insurance provided through the credit card company is secondary insurance meaning that they will only provide coverage after your primary insurance has been used. Some companies will provide coverage if you don’t have auto insurance, but make sure to confirm with your credit card issuer before assuming they will provide coverage.
Buying a Policy on Your Own
There are companies who sell standalone rental car insurance for cheaper than the rental car company will sell you. Most policies they’ll sell you at the counter range from $10-30 a day while buying from another company will typically run less than $10 a day. These policies are primary insurance, so they will pay out before your personal coverage and work even if you don’t have auto insurance. Check with your personal insurance provider to see if they offer a rental car policy before shopping around.
There’s typically no reason to buy insurance from the rental car counter. Your coverage should be enough, and if you don’t have auto insurance, there are still cheaper options. Still need help understanding if you need rental car insurance? Take a look around our site to learn everything you need to about cheap car insurance and reach out to an agent today!
