It’s a good idea to go over your personal car insurance policy’s coverage before renting a car. In some cases, the coverage you have on your own vehicle extends to a rented vehicle. In other words, purchasing rental car insurance may duplicate what you already have.
However, in some cases, the additional cost of the rental company’s coverage may be justified. As a result, it’s critical to understand what your personal auto insurance policy entails.
insurance covers, and what the rental agency is offering.
IS RENTAL CAR INSURANCE COVERED BY MY CAR INSURANCE?
A personal car insurance policy includes liability coverage as well as any additional coverage you’ve chosen, such as comprehensive or collision. That coverage may extend to your rental car if you use it for personal purposes. Your personal policy’s coverage limits and deductibles apply to your use of a rental car as well.
If you cause an accident in your vehicle, liability coverage helps pay for another person’s medical bills or damage to another person’s property (or your rental vehicle).
Comprehensive coverage assists in the repair of your vehicle (or rental car) if it is damaged by a covered peril such as theft, wind, fire, or natural disasters. The deductible for your comprehensive coverage will be applied.
Collision coverage pays to repair your vehicle (or a rental car) if it is damaged in a collision with another vehicle or an object, such as a fence or a tree. The deductible on your collision coverage will be applied.
DOES MY CREDIT CARD PROVIDE CAR RENTAL COVERAGE?
According to the Insurance Information Institute, certain credit cards provide additional insurance if you pay for a car rental with that card in addition to your auto insurance (III). If you have additional rental car insurance through your credit card company, call the toll-free number on the back of your card and have them explain your options thoroughly before you reserve your car.
For example, if your credit card provides collision coverage for rental cars, you may choose not to purchase it from the car rental agency. According to the III, the card issuer’s insurance is typically “secondary.” That is, it may cover your deductible and any expenses that exceed what your primary insurance company will cover.
According to Forbes, some credit card companies may exclude coverage for certain types of rental vehicles, such as:
Automobiles de luxe
WHEN IS RENTAL CAR INSURANCE A GOOD IDEA?
If you don’t have insurance, you’ll need to purchase liability coverage from the rental company before hitting the road. This is due to the fact that liability coverage for all drivers is required by law in the majority of states.
If any of the following scenarios apply, the additional protection provided by rental insurance is worthwhile to consider:
Your current policy does not cover comprehensive or collision damage.
You are only covered by a commercial auto insurance policy.
You don’t want to take the risk of having to pay a high deductible.
And if you’re driving outside of Canada, your current car insurance will most likely not cover you. To find out, consult your insurance policy.
WHAT ARE YOUR RENTAL CAR INSURANCE OPTIONS?
According to the III, rental car companies typically categorize their extra rental car insurance offerings into four categories:
Coverage for liability
Waiver of Collision/Loss Damage
Coverage for personal effects
Personal accident insurance
Coverage for Liability
Liability coverage is designed to protect you if you injure or damage someone else’s property while driving. You may not need to purchase additional rental car liability insurance coverage from the agency if you have adequate liability coverage through your own auto insurance. Your insurance agent can assist you in reviewing your coverage so that you can determine the appropriate liability limit for you.
Waiver of Collision/Loss Damage
A collision/loss damage waiver (also referred to as an LDW or CDW) is not insurance. If you damage the rental car, this waiver may assist in covering the cost of repairs. Typically, the waiver does not cover damage caused by speeding or driving on unpaved roads.
If you have collision and comprehensive coverage on your own car, a collision damage waiver may duplicate your existing coverage. However, if you have dropped collision or comprehensive coverage from your policy and do not purchase the waiver, you will most likely have to pay for any damage to the rental car out of pocket.
Furthermore, a rental agency may charge you for “loss of use” of the car (lost rental income) while it is being repaired. Typically, your own auto policy will not reimburse you for this. Make sure to carefully read your car rental agreement to understand what charges you might face if you damage the vehicle.
Personal Effects Insurance
If your personal belongings, such as your laptop or clothing, are stolen from the rental car, personal effects coverage may help cover them. If you have renters or homeowners insurance, the personal property coverage on that policy will usually cover your personal belongings through what is known as “off-premises coverage.”
Off-premise items are typically covered only up to a certain percentage of your personal property coverage. Your deductible from your homeowners or renters insurance will be applied. Check with your agent about the coverage limits.
Accident Insurance for Individuals
If you are injured in a rental car accident, personal accident insurance can help pay your medical bills and those of your passengers. According to the III, if your car insurance policy includes health insurance, medical payments coverage, or personal injury protection, you may already have coverage comparable to what the rental company provides.
Accident insurance for individuals
If you are injured in a rental car accident, this coverage will assist you in paying your medical bills as well as the medical bills of your passengers. According to the III, if your car insurance policy includes health insurance, medical payments coverage, or personal injury protection, you may already have coverage comparable to what the rental company provides.
Medical payments coverage and personal injury protection (not available in all states) may assist in the payment of medical bills incurred as a result of a covered car accident.