When you rent a car, you may be offered something called rental car insurance. This kind of insurance may be important in certain circumstances, since it can help you avoid unnecessary expenses or liability.
In the event of an accident, rental car insurance can help pay for covered damages or medical expenses. To see if you need car rental coverage, we’ll discuss what rental car insurance may cover, what rental companies typically offer, and if your personal auto insurance may already cover rental car damages.
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Rental car insurance options
When you book a car, rental companies may offer you several types of coverage. Insurance for rental cars can include:
- Liability coverage: This can help medical costs and damage you might cause to others while driving the rental car.
- Personal accident insurance: This can help cover bodily injuries to you and your passengers, as well as damage to the rental vehicle from an accident.
- Personal effects coverage: This insurance may cover theft of personal items stolen from the rental car, such as bags, wallets, or electronics.
- Collision damage waiver (CDW): This is not technically insurance but a waiver that can help limit your financial responsibility for damage to the rental car. If you opt for a CDW, you may not have to pay for repairs if the car is damaged in an accident, but this waiver will typically come with a deductible.
Do I need rental car insurance?
Whether you need rental car insurance may depend on your current insurance policies and state law. If you already meet the liability insurance minimum in your state, your insurance may be able to cover damages to another vehicle during a covered rental car accident. In this case, purchasing liability coverage through the rental car company may be redundant. If you don’t already own a car or have liability insurance, you’ll need to purchase your state’s liability coverage minimum through the rental company.
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Does my insurance cover rental cars?
If you have personal auto insurance, your policy may already cover damages to someone else’s vehicle while driving a rental car. If you have full coverage on your personal vehicle (which means you have liability, comprehensive, and collision coverage), you may have additional coverage like for accidents involving non-collision events. However, there are exceptions. For example, if you're renting a car for business purposes, your personal auto insurance may not apply.
Additionally, if you're traveling abroad, your personal auto insurance may not cover rental vehicles in other countries. In these cases, it may be a good idea to purchase international rental car insurance through the rental company or check with your credit card provider, as they may offer coverage for rentals overseas.
What does rental car insurance cover that other policies might not?
Rental car insurance can help cover certain fees and incidents that your personal auto policy may not. Here are a few situations rental car insurance may cover:
- Loss of use fees: If the rental car is damaged and needs repairs, the rental company may charge you for the days the car can’t be rented. This fee may be substantial and is not always covered by personal auto insurance.
- Administrative fees: If an accident occurs, the rental company may charge fees for processing the claim and handling the paperwork.
- Diminished value: After a car is damaged and repaired, it may lose value. Rental companies may charge you for the diminished value, which personal insurance often does not cover.
Understanding these rental car insurance nuances may help you avoid unexpected costs after an accident.
Does my credit card provide rental car insurance?
Some credit card companies may offer a form of rental car coverage, typically for damage or theft. This coverage can be a helpful addition to your personal auto insurance policy. However, the specifics vary between credit card companies, with each company having specific limits on how much damage they may help pay for. It's crucial to check with your credit card issuer to understand what could be covered as well as certain limitations that may apply.
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Pros of purchasing rental car insurance
There are rental car insurance benefits that may help you while driving a rented vehicle. Here are some pros that may come with purchasing this coverage:
- Simplified claims process: Dealing directly with the rental company may be more efficient than filing an insurance claim with your personal auto insurance provider.
- Extra coverage for specific risks: Rental car insurance often can help cover specific costs that personal auto insurance might not, like diminished car value after an accident or administrative fees.
Infinity Insurance Agency, Inc. can help
If you're considering renting a car and want to see if you have adequate coverage, reviewing your personal auto insurance policy and what’s offered by the rental car company may help you understand what you need. If you’re on the hunt for additional coverage or want to discuss your auto insurance policy further, you can call Infinity Insurance Agency, Inc. at 1-855-478-3705. Our agents can assist you with finding the right coverage for your needs and budget.