Rental car insurance can cover you if your rented car is damaged or stolen. Car rental insurance can include personal injury protection, collision coverage, and comprehensive coverage. This guide will cover the various options offered by a rental agency, as well as personal auto insurance policies, credit card benefits, and travel insurance plans that can provide alternate car insurance for rental cars.
What Is Rental Car Insurance?
Rental car insurance covers the cost of a damaged or stolen rental vehicle.
Generally, your personal auto policy will provide coverage for a rental car if you are using it for personal purposes. Before you even go to the rental car company, call your insurance company to determine what your current auto insurance covers when you are driving a rental car.
If you do not currently have comprehensive coverage or collision coverage, or if you choose to rent a vehicle your insurance company won’t cover, you can purchase a loss-damage waiver (LDW) from the rental car company. This waiver will absolve you of financial responsibility if the car is lost or damaged.
Regardless, it is important to read your rental agreement carefully so you know what is covered and what isn't.
Types of Rental Car Insurance Coverage
There are several types of rental car insurance to consider, including the following:
Liability coverage: Liability car insurance pays others when you are responsible for a car accident.
Collision damage waiver (CDW): A CDW will waive any fees associated with damage to your rental vehicle in the wake of an accident, weather, vandalism, and other serious incidents.
Personal effects coverage: Much like it sounds, personal effects coverage protects you if personal items are stolen from your rental car.
When Do You Need Rental Car Insurance?
Does my car insurance cover rental cars? Often, your current auto insurance will cover you when you are renting a vehicle. However, there are a few key scenarios where you may need rental car insurance:
Scenario 1: Traveling without personal car insurance: If you do not already have personal auto insurance, then you will likely want to purchase rental car insurance. For starters, most states require drivers to carry a minimum amount of car insurance. In addition, if you are in an accident or your rental car is otherwise damaged, the costs can be significant. Non-owner car insurance can save you a lot of money if you are in an accident.
Scenario 2: Using a credit card for rental coverage: Many credit cards offer rental car insurance as a perk if you use the card to pay for the car rental. This coverage is typically automatic, although you will want to contact your credit card company to discuss the details. However, credit card coverage is what's known as secondary coverage, so your primary auto insurance company will pay first when available.
Scenario 3: High-risk situations: If you are driving in a foreign country known for bad roads or high rates of theft, or if you choose to rent a luxury vehicle that your current auto insurance policy does not cover, you may want to look into rental car insurance.
How Personal Car Insurance Impacts Rental Coverage
As a general rule, your personal car insurance policy will provide some coverage when it comes to car rental. It is always a good idea to check with your insurer before you head out on vacation or sign a rental agreement to determine what is covered and what is not. Some personal auto insurance policies will cover non-accident-related damage, and some won't. You will also want to review your deductible to better understand what you might have to pay out of pocket.
There are limitations to personal insurance. For instance, your personal policy may not cover the rental car company's charges for loss of use or stolen personal property. Likewise, many rental companies have notable exclusions, such as international car rentals, rental for business purposes, driving on unpaved roads, or high-value car rentals.
Evaluating Your Insurance Needs
Before you sign or e-sign on the dotted line, make sure you evaluate your current insurance needs. Start by:
Assessing your existing car insurance policy: What does it cover? What does it exclude? If you are struggling to understand the fine print, call your insurance company to ask what your current policy covers.
Considering trip specifics: Where are you traveling to? What are the driving conditions like? What are the local rates of theft and vandalism? When you take a closer look at your travel needs, you will have a better idea of whether or not you need rental car insurance.H2
Get a Quote for Rental Car Insurance
You can get a free quote for rental car insurance from EverQuote, which gives you the ability to compare insurance quotes side by side to find the best option for your needs. You may also want to consider umbrella insurance, which provides extra protection to your existing policies in case of a major disaster.
Reach out to EverQuote today to find affordable, flexible auto insurance for home and travel.