Does Your Personal Car Insurance Policy Cover Rental Cars?

Does car insurance cover rental cars?

Before you head to a rental car dealership, you need to understand what kind of insurance coverage is required to drive in their vehicle. If you’ve rented a car before, you’ve likely met with a salesperson or agent from the company that tried to sell you their brand of rental car insurance. It’s costly, and if you make your trip without incident, you’ll feel as though you’ve wasted your money.

Instead, you should be aware that your current car insurance policy already has rental car insurance included, in most instances. You’ll have to review your personalized coverage, but you’re likely covered as a driver in a rental vehicle as part of your premiums. 

It’s important to check your rental reimbursement coverage beforehand or have your insurance agent do it to determine what kind of protection you have, if any. Most policies will have limits, but as long as you’ve paid your premiums, you shouldn’t have anything to worry about.

Should You Get Rental Car Insurance or Use Your Own?

If you are involved in an accident, or if something happens to your rental car (like theft or vandalism) should you claim it on your insurance, or would it be more cost-effective to keep it off your policy? 

Some types of incidents will affect your premium amounts. For instance, if you’ve already had several accidents reported, you could be looking at a rate increase or even possibly being dropped altogether because you’re considered a high-risk driver. In those instances, should you take the rental company insurance and keep your personal policy alone?

As long as you’ve reviewed your policy and have a clean record, you shouldn’t have any issues using your own insurance policy instead of paying the high rates for rental car insurance. 

One factor to keep in mind is that some car rental companies charge for more than physical damages like loss of use, towing, administrative fees, and diminished value, which most personal policies don’t include. 

Additionally, your policy may also not cover you outside of the United States, so if you’re traveling internationally, it’s something to consider.

What to Check Before You Rent a Car

Before you rent a car, look for these things in your personal car insurance policy:

  • Whether or not you’ve been paying premiums for rental car coverage
  • What type of coverage you’re allotted in the event of an accident
  • Where your personal policy coverage extends in terms of physical location – local, nationwide, international
  • Your deductible
  • How much liability coverage is included in your rental car insurance 

The quickest and easiest way to get answers to these questions is by contacting your insurance provider. 

What if you get into a collision?

The first action you should always take when you get in any car accident is to check yourself, your passengers, and any other people involved, for injuries. If someone’s been hurt, call an ambulance. Otherwise, a phone call to the police station should be made to get someone that can write an accident statement on the way.

Next, start taking your own notes and photos, as well as sharing information with the other driver or drivers, including personal details like name, address, phone number, and insurance carrier. 

Use your phone to take pictures of the damages to all vehicles and the surroundings. Law enforcement will do this upon arrival, but it’s always a good idea to have your own evidence file.

This all probably sounds pretty familiar to what steps would be followed if it were your own vehicle, but it’s going to change a bit for rentals. 

You have to get in touch with the company that you rented the car from as soon as possible. If you have rental insurance coverage through them, they will likely come and get the car or have a tow company sent, and you’ll have to fill out an incident report explaining what happened.

If you choose to pass on their policy options, you have to reach out to your insurance provider. They will establish a claim and inform you of your deductible and what to do next. Make sure to ask them things like:

  • The liability, comprehensive, and collision coverage limits you have
  • If you have to file the accident report, or if they take care of it
  • The exact price of your deductible

The more information you can gather from your insurance company and provide them with in return, the smoother the rest of the process will go.

What if you, your passenger, or someone else gets injured?

In an instance where someone gets hurt during the accident, they will have to get medical attention either by the transportation of an ambulance or a personal vehicle. Before they leave, (or if there is someone else with them), you need to make certain the injured party has your contact information. 

If you were the one that caused the accident, you could be held liable for their medical expenses. Some states make Personal Injury Protection (PIP) mandatory. That will cover all the medical bills, rehabilitation costs, and other expenses resulting from the accident.

Suppose you’re located in a state that doesn’t require this additional protection. In that case, you may be required to pay for all the injury costs that go beyond what your liability, collision, and comprehensive coverage provide.

What if your car or things inside your car get stolen?

Unfortunately, if you’re working with your personal car insurance company only, personal items left inside your rental car are not covered under your policy. In some instances, if you add modifications like a new stereo or speakers and those get stolen, you may be able to get your money back. You have to obtain a special insurance endorsement to take care of those items, though.

The comprehensive insurance coverage you have will thankfully take care of any of the damages caused during a break-in or attempted break-in. It will also cover things that were stolen that were initially a part of the vehicle, like wheels, tires, or a stock radio.

Some rental car insurances come with an option to buy Personal Effects Insurance, or you can add a Personal Effects Floater to your existing homeowners or renters insurance policy. It will pay for your belongings or other property if it’s taken from your borrowed vehicle. It’s an additional charge (usually a few dollars per day) and there are limits to the allotted amounts per individual.

What Are The Different Rental Car Insurance Options?

Legally, you don’t need insurance to rent a car. Not having a personal policy, taking a rental company’s provided insurance, or using a credit card that gives you coverage could result in disaster — potentially a costly one. 

You can’t predict when an accident will happen. Even if you’re the most cautious driver on the road, there’s no way to control what others are doing, and if someone hits you, you could be held responsible for all the expenses. 

Rental car companies will provide you with a list of insurance choices, and if you refuse to sign up and don’t have your own, there will be documentation within your paperwork stating that you’re responsible for at least some if not all of the repairs. Some of the entities that rent out vehicles automatically charge you for the full value of the car. 

To avoid paying tens of thousands of dollars, know what your options are for rental car coverage. After you review the details, you can better determine which selection is your best option. It’s different for everyone, so don’t assume that you do or do not need insurance before checking out the facts.

Coverage from Your Personal Policy

Your personal car insurance, depending on your coverage, automatically covers you in a rental car or any vehicle that you drive. Liability insurance is part of the premium you pay, so depending on where your levels are at, you could be off the hook as far as any medical costs or car repairs to other vehicles in the event of an accident. It’s a good idea to review what you have in place and maybe make some adjustments before leaving for a vacation in a borrowed vehicle.

Coverage from Rental Companies

Rental car companies will try and sell you their policies when you reserve your desired vehicle. These include things like a “loss damage waiver” (LDW) or “collision damage waiver” (CDW) that are there to absolve you of financial responsibility as the result of an accident or other covered incident. 

Often, the person at the rental counter might try to use tricky sales tactics to make it sound as though you HAVE to have it when in reality, you don’t. If you have excellent car insurance already, and maybe you’re renting the vehicle with a credit card (we’ll detail more below), then you don’t need their policy at all — no matter what they might tell you.

Rental car insurance can be rather costly, and if you’re someone with excellent driving ability and a clean record, it’s something you may be able to get away from. The primary benefit of purchasing this type of insurance is that the rental car company takes care of everything, regardless of the situation.

You could haul the car, truck, or SUV you had for the week into the lot on a flatbed truck destroyed, drop it off, and walk away. There’s nothing they would charge you. It gives many people peace of mind, and that’s something that you value more than money; it’s the only way to be removed entirely from all responsibility for damages.

Coverage from Your Credit Card

Some credit card companies will give partial or entirely free rental protection if you swipe their card when renting a car. Finding out what your credit card companies offer is relatively easy in most cases, and all you have to do is call the customer service number to ask. You probably also received a guide or document explaining your benefits when you first signed up through the lender. And if you’ve misplaced your paperwork, you can search for what their services are on their website.

There may be limitations to the coverage amounts, or there could be exclusions as to what the credit card company is willing to pay for. It only takes a few minutes to talk with the customer service department, and if there is coverage included, it will save you a few hundred dollars.

Does Your Personal Insurance Cover Peer-to-Peer Rentals, like Turo?

Peer-to-peer rentals fall into a similar category as rental cars when talking about insurance coverage. Just like with the liability coverage you have protecting you when you rent a car from a major car rental company, the same goes for these privatized rentals or car rental businesses.

Additionally, the car is already covered by the insurance of the owner. Companies like Turo will make protection plans available in addition to what’s already in place. Still, it’s not always necessary if there is enough liability coverage held by the renter and the person renting the automobile out.

Rental Car Insurance FAQs

Do you really need rental car insurance?

No, not necessarily. Most insurance policies already have you paying a premium for rental insurance coverage. Ask your agent or review your policy for limits on dollar amounts and anything that may NOT be included.

Do I already have rental car insurance through my insurer?

Your primary car insurance policy will cover your rental car by using the liability coverage protection you have. It automatically transfers over if you cause an accident in another vehicle. Check your policy limits to know precisely how much coverage you have.

Does my credit card cover car rental insurance?

Most major credit cards have car rental insurance included. It may be secondary to your primary insurance, meaning your primary insurance will take care of the damages, and your credit card will cover your deductible. You almost always have to use that card to make the rental payment for it to kick in, though.

Can I rent a car without insurance?

Yes. There are no laws that state you must have car insurance to rent a vehicle. The car is already legally insured by the rental car company.

What happens if you damage a rental car without insurance?

If you opt-out of getting the rental insurance coverage from the company you’re renting from, and you don’t have your own policy or coverage from your credit card company, you’ll have to pay for any and all damages out of pocket.

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