Does Auto Insurance Cover Rental Cars?

Rental Car Insurance

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Planning a road trip with family and friends is always very exciting and fun. As you make preparations for your most awaited excursion, you head to the Car Rental Company. One of the most common questions they ask is if you will buy car insurance from them for the rented car.

Of course, you would not want to spoil your trip by getting into any unforeseen situation and opt for the auto insurance coverage straight away. Above all, nobody would want to drive around in an uninsured car and invite legal problems.

However, it might be the case that you do not actually need auto insurance for the rented car. Here is how insurance works for rented cars.

Read also: Auto Insurance Laws In Texas

Insurance Offered By Car Rental Companies:

Here are some of the most common insurance coverage options offered by rental car companies.

Loss/damage waiver:

This coverage protects against damages arising from your rented car being lost, stolen or damaged due to an accident. The coverage also protects against damages resulting from vandalism.

Liability insurance:

In case you cause loss to someone else’s vehicle or property while driving your car, liability insurance protects against damages. To be driving legally in most of the states in the US you must have liability insurance. It pays for medical expenses of the other party arising from an accident in which you were at fault.

Personal accident insurance:

It pays for medical expenses resulting from an accident in which you and your passengers were hurt.

Personal Effects Coverage:

This coverage pays for damages resulting from important valuable items being stolen or harmed from the rented car.

Things to consider before deciding whether you need insurance on a rented car or not:

Amount Of Liability Coverage:

In most of the states in the US a minimum level of liability insurance is mandatory. However, this level is not sufficient mostly and people get a greater amount of liability insurance. If you have a reasonable level of liability you might not need to get additional liability insurance when renting a car.

Level Of Your Insurance Coverage:

Some people opt for full insurance coverage. They also have collision and comprehensive coverage for their car. Collision coverage protects against damages arising from an accident in which your car collides with another car. On the other hand, comprehensive coverage pays for damages arising from any other factor such as extreme weather, fire or vandalism. Some insurers extend full coverage to include covering rented cars as well. If your insurance company is one of them, you may not need to insure your rented car separately.  

Availability Of Personal Injury Protection:

Those who have health insurance or personal injury protection (PIP) as per their car insurance do not need to get personal accident insurance for a rental car.

Insurance Coverage Through Credit Card:

Some credit card companies provide car insurance on rented cars. Ask your credit card company if it also provides rental car insurance. Get the following details from the credit card company’s helpline:

  • Procedure to get insurance coverage for a rental car
  • Ask whether the coverage is primary or secondary
  • Find what are the inclusions and exclusions of the insurance coverage
  • Period for which the car will be covered.

In most cases, the rental car company will ask you to give proof of your auto insurance. If you already have car insurance, you would not be required to buy rental car insurance. However, if you are relying on the credit card for your rental car insurance, you will have to show a document endorsing the fact that your credit card company is giving you rental car insurance.