Does my car insurance cover rental cars? We’ll contrast the types of protection provided by rental companies with those provided by insurers and identify any gaps you may need to fill.
In most cases, your own car insurance policy applies when renting a car, so you may not need to buy additional protection from the rental car company.
Please read on for more detailed information.
What is Rental Car Insurance?
Not to be confused with rental reimbursement coverage, which is an add-on to your auto insurance policy that provides reimbursement for a rental car in the event your car is being repaired due to a covered loss or accident, rental car insurance is insurance that covers you when you rent a vehicle directly from a rental car company, such as Enterprise Rent-A-Car. You will be asked whether you want to add insurance to your rental car or whether you want to forego it when you rent a car at the airport or another rental car location.
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Do I Need Insurance to Rent a Car?
Before driving a rental car, you should have liability insurance at the very least. How Much Does General Liability Insurance Cost? Most states mandate having liability insurance, which covers any harm you unintentionally cause to someone else’s person or property.
You’ll also require additional forms of protection. This protection includes assistance with paying for your medical expenses following an accident as well as repairs for a rental car.
However, you are not required to purchase each of these coverage options from the rental car agency. In fact, you might already have some coverage through existing policies, such as:
- Your personal car insurance policy
- The credit card you used to book the rental car
- Health insurance
- Travel insurance
- Non-owner car insurance
- Home, condo or renters insurance
- Umbrella insurance
You wouldn’t need to purchase additional insurance from the rental car company if you already have coverage under one of those policies. On the other hand, you should buy rental car insurance to make sure you are sufficiently covered if your personal auto insurance, credit card, or other forms of insurance do not adequately cover you or if there are gaps in your coverage.
Does My Personal Car Insurance Cover Rental Cars?
The same coverage limits and deductibles as your own policy typically apply to rental cars covered by your personal auto insurance. However, only rental cars used for personal purposes, such as traveling, are covered by your personal auto insurance. It won’t pay for work-related activities like using a rental car to travel to a client’s location.
You may have some gaps in coverage between your personal car insurance and your rental car. For example, your personal car insurance typically won’t cover the rental company’s “loss of use” fee, which is the charge for lost income while the rental car is in the repair shop.
Here are a few typical coverage categories and how they relate to driving a rental car.
Liability Car Insurance
If you accidentally back into someone’s fence while operating a rental car, your liability car insurance will cover the resulting injuries and property damage. Your personal auto insurance policy’s policy limits that you selected will determine the extent of your protection.
How Much Does General Liability Insurance Cost? For instance, if you have liability insurance with limits of $100,000 for bodily injury to one person per accident, $300,000 for bodily injury to more than one person per accident, and $100,000 in property damage per accident (known as 100/300/100), you will be protected up to those limits if you cause an accident in your rental car.
Collision and Comprehensive Insurance
Following issues like car accidents, theft, fire, floods, collisions with animals, falling objects, inclement weather, and vandalism, collision and comprehensive insurance will pay to repair or replace your rental car. If you need to make a claim on your collision or comprehensive insurance for a rental car, your insurance deductible will be applicable.
Personal Injury Protection (PIP) and Medical Payments Coverage (MedPay)
Your insurance will pay for your and your passengers’ medical costs if you are hurt while operating a rental car if you have personal injury protection (PIP) and/or medical payments coverage.
For example, if you get hurt while driving a rental car, your PIP coverage can cover expenses like medical bills, lost wages and replacement services for tasks you cannot perform due to the injuries, such as house cleaning and childcare.
Which Insurers Cover Rental Cars?
Rental car coverage is a common feature of auto insurance policies. All 10 of the biggest insurers nationally cover rental cars in most cases:
- State Farm
- Progressive
- Geico
- Allstate
- USAA
- Liberty Mutual
- Farmers
- Travelers
- Nationwide
- American Family
To be certain that you are covered, you should consult your policy’s language or call your insurance agent.
When Should I Buy Rental Insurance, Even If I’m Already Covered?
There are a few cases when you might want to purchase insurance from a rental company, even if you’re already covered by your personal policies:
- You are only covered by liability insurance.
- You only have the bare minimum liability coverage required by law.
- High deductibles apply to your personal auto insurance policies.
- You want to protect the premiums on your individual auto policy because you are a high-risk driver.
- For collision or comprehensive plans, you have extremely low limits.
Can You Drive Other Cars on Your Policy?
In the past, insurance companies generally gave fully comprehensive policy providers the perk of being able to drive someone else’s car – provided they had given you permission of course.
The car you were driving needed to be insured, but as long as it was, your fully comprehensive insurance usually allowed you to drive another car on a third-party only basis, providing the bare minimum of insurance protection.
The issue is that insurers no longer always provide this benefit; however, assuming they do, tens of thousands of drivers fall victim to it each year.
Since driving another car was a benefit that frequently resulted in the insurer incurring expenses, many of them removed the perk as a result of rising claims costs that forced insurers to reduce certain aspects of their policies.
It’s imperative that you check your policy to make sure you’re covered before getting into someone else’s car. If you’re not, you could be prosecuted for driving without insurance – and you could end up with your friend’s car being impounded.
FAQs
Does My Car Insurance Cover Rental Cars Australia?
Rental cars usually only come with compulsory third-party insurance, which is part of their registration anywhere in Australia. You might not need to purchase additional auto insurance for rental cars if your comprehensive or third-party fire and theft auto insurance covers your rental vehicle.
Does My Car Insurance Cover Rental Cars in Ireland?
Chances are, they will not cover your rental in Ireland. Your own car insurance won’t either. The Republic of Ireland is one of the few countries in the world that most credit cards and personal auto companies just won’t cover.
Do You Need Car Insurance to Rent a Car in Florida?
In Florida, rental car insurance is not required by law.
However, it is advised to take precautions while renting a car in case of an accident or theft. Both the rental car company and your auto insurance provider offer rental car insurance.
What Does Comprehensive Car Insurance Cover?
Comprehensive car insurance is the type of insurance that covers damage to your own insured car, and the damage its use can cause to other vehicles or property. Your vehicle’s damage from unanticipated events like collisions, fires, thefts, or weather-related events is repaired by comprehensive auto insurance.
Summary: Is Rental Car Insurance Worth It?
If your personal auto insurance policy already provides coverage akin to that of a rental car, you may not always need to purchase additional coverage. It also might not be worth it if there’s overlap between what’s offered at the counter and your existing coverage on other insurance policies, such as your health insurance and homeowners insurance.
If you don’t have any other options or you need to fill any gaps in coverage from your current policies, buying rental car insurance from the rental car company may be worthwhile. For example, if you have a car insurance policy but don’t carry collision or comprehensive insurance, you may want to consider buying the CDW from the rental car company to cover any damages to the rental car.
However, it’s still a good idea to comparison shop before you arrive at the rental car counter even if you don’t have certain coverage types, such as collision and comprehensive insurance. A different company might offer insurance for a rental car for less money.
If you have any questions, please leave a comment. KV Auto tries to give you the best car industry information. Thank you for reading.
