Your personal auto insurance, including all limits and deductibles, extends to almost any rental car you drive. That means, if you carry comprehensive and collision coverage on your daily ride, you'll be protected against physical damage to your rental car. Your liability coverage also applies when you get behind the wheel of a rented vehicle.
Do you need rental car insurance?
In most instances, rental car insurance overlaps with your personal auto policy and you won't need to pay for duplicate coverage. However, there are situations where it makes sense to pick up rental insurance. Understand what your personal auto policy covers before opting to sign up for rental insurance.
Rental car insurance coverages you may already have on your auto or home policy:
Liability: Since nearly every state requires liability insurance, your personal auto policy already protects you against any damage or injury you cause while driving a rental car, up to the limits of your policy.
Loss-damage waiver: If your rental car is stolen, vandalized, or damaged in an accident, a loss-damage waiver means you won't be held responsible by the rental car company. This can also be referred to as a collision damage waiver by some rental car companies. While the waiver is relatively inexpensive, you're already covered for physical damage to your rental car if you carry comprehensive and collision on your auto policy. Comprehensive covers damage from events out of your control: theft, fire, vandalism, weather-related issues, and hitting an animal. Collision protects against damage from accidents involving another vehicle or object.
Personal accident insurance: Personal accident coverage protects against injuries to you and your passengers while driving a rental car. However, if you already have medical payments coverage or personal injury protection (PIP) on your auto policy, you're likely covered for medical bills resulting from an auto accident involving the rental car. Your health insurance coverage may also determine whether personal accident coverage is needed.
Personal effects coverage: Generally inexpensive and available from most rental car companies, personal effects coverage covers personal items stolen from a rental car. However, your belongings are already covered under your personal property insurance on your homeowners, condo, or renters policy — even while traveling away from home in a rental car.
When to consider adding rental car insurance
While rental car coverage invariably overlaps with your existing home or auto insurance, there are a few instances where adding rental car insurance could be beneficial:
- Deductibles may not apply with rental car insurance: If you have a high deductible on your personal auto policy, you could pay much less or nothing out of pocket on a rental car insurance claim.
- Avoid claims against your personal car insurance: If you have a claim, you can file it against the rental car insurance, which can avoid a potential rate increase to your personal policy.
- You have no coverage on your personal auto policy: If you don't have comprehensive or collision coverage on your personal auto policy, adding the loss-damage waiver can protect you against damage to your rental car.
- You can temporarily increase your coverage limits: You may only carry the state minimum for liability coverage on your personal auto policy or maybe you aren't carrying enough car insurance coverage for your own peace of mind while driving a rental car. Adding additional liability from the rental company means greater protection if you're at-fault in an accident.
Does your credit card offer rental car coverage?
Some credit card companies provide insurance coverage if you use their card to pay for the car rental. Be sure to check with your credit card holder for what they'll cover, as each credit card company has specific rules and restrictions.
Do you need rental car reimbursement coverage?
Rental car reimbursement is always an optional coverage but can be extra-important if you find yourself without a vehicle due to a covered accident. While your car is being repaired, will you have access to another vehicle? Can family members drive you to work or wherever else you need to go? If not, rental reimbursement is an affordable coverage that can guarantee you aren't left without a ride.
How to get a rental car from an insurance claim
Most insurance companies offer rental car reimbursement coverage which reimburses you for the cost of a rental car while your vehicle is being repaired due to a covered accident. You're typically covered between $30-$60 per day for up to one month.