Yes, personal car insurance policies cover rental cars. However, it is advisable to understand your insurance options before getting to the rental car counter. Sometimes, most drivers do not know that they may have insurance coverage for rental cars through their personal auto insurance, credit cards, or other insurance plans.
This is why it is very important to discuss with your insurance company or agent to know how and what auto policy will help cover rental cars.
Do I Need Insurance to Rent a Car?
Just so you know, at the very least, in most states in the USA, you are required to have liability insurance to rent a car. This help covers injuries and property damage you are responsible for and is required by law in most states.
You’ll probably want additional coverage in order to pay for repairs to the rental car or your medical bills if you are involved in an accident. However, you really don’t have to buy this from the rental car company. You might already be covered through:
- Your personal car insurance
- credit card
- Health insurance
- Travel insurance
- Non-owner car insurance
- Umbrella insurance
If you lack coverage from any of the above-listed sources, or if they don’t cover everything, you should consider buying rental car insurance to ensure you’re fully protected.
When does My Personal Car Insurance Cover Rental Cars?
Just as I have mentioned above, your personal car insurance typically covers rental cars. It covers it with the same limits and deductibles just as the normal policy. However, you need to keep in mind that this only applies to rental cars used for personal purposes, such as a vacation. Your personal auto policy won’t cover rentals for business use, such as meeting a client.
Also, there can be gaps in coverage. For instance, your personal car insurance typically doesn’t cover the rental company’s “loss of use” fee, which is the income the policyholder loses while the car is being repaired.
Personal Auto Insurance and Rental Cars
The following is the coverage offered by personal car insurance. Check out how they apply to rental cars.
Liability car insurance
If you ran into someone’s fence with the car you rented, this coverage will pay for the damage up to your policy limits. It pays for damages caused to others by you literally.
Collision and comprehensive insurance
Collision and comprehensive insurance can help to pay for repairs or replacement if the car that was rented was damaged by accidents, theft, fire, floods, animals, falling objects, severe weather, or vandalism. Keep in mind that your deductible will apply if you need to file a claim.
Personal injury protection (PIP) and medical payments (MedPay)
Having PIP or MedPay will help you cover medical expenses for you and your passengers if you’re injured while driving a rental car. PIP can cover medical bills, lost wages, and services that the policyholder cannot do because of injuries, like house cleaning. MedPay, on the other hand, covers medical bills regardless of who is at fault and is typically available in small amounts depending on your location.
What is Rental Car Insurance?
Rental car insurance is a separate insurance policy that you buy from the rental car company to protect you while using their vehicle. Depending on the type, it can cover:
- Accidents you caused
- Injuries you get from an accident regardless of who is at fault
- Your stolen personal belongings
- Damage to the rental car
This insurance is totally different from rental reimbursement coverage. That helps pay for a rental car while your own car is being repaired from damages caused in an accident.
Just so you know, rental car insurance can be quite useful. If your current car insurance doesn’t include the full coverage (collision and comprehensive), does not cover rental cars, or if you don’t have car insurance at all.
What Are the Different Rental Car Insurance Options?
When you want to rent a car, you have the chance to choose from several insurance options offered by the rental company. Here are the common types of coverage available:
Collision Damage Waiver (CDW)
- Coverage: Covers damage to or theft of the rental car. Also known as Loss Damage Waiver (LDW).
- Cost: Typically around $30 per day.
It is a good one for people without a personal car insurance policy covering rental cars, those without a credit card providing rental car coverage. And people who do not have a third-party rental car insurance policy.
Supplemental Liability Insurance (SLP)
This helps to protect against property damage and bodily injuries you cause to others. A good example is if you hit another car and that caused the other driver to be injured, SLP can cover their medical expenses.
- Variations:
- Alamo and Enterprise: They will help cover for about $300,000 in liability coverage.
- Hertz: This will help to cover about $1 million in most states.
Personal Accident Insurance (PAI)
Personal Accident Insurance (PAI) kicks in to pay for medical costs if you or your passengers are injured in an accident while driving rental cars. PAI typically covers:
- Accidental death and dismemberment
- Ambulance bills
- Medical expenses
Personal Effects Coverage (PEC)
Personal Effects Coverage (PEC) helps to protect your personal items if they get stolen from the vehicle that you rented. However, you need to keep in mind that there are certain personal items that may not be covered, including:
- Animals
- Bicycles
- Eyeglasses
- contact lenses
- sunglasses
- Hearing aids
- Money
- Prosthetic devices
Always keep in mind thatyou may already have coverage for personal items stolen from a rental car through your home, condo, or renters’ insurance policy. Meet with your insurance provider and ask questions about what your policy covers.
Roadside Assistance
Roadside Assistance will help with issues like:
- Changing a flat tire
- Delivering fuel if you ran out of gas.
- Jump-starting of a battery that is dead.
- Locking a locksmith if you get locked out
- Towing of the rental car
You don’t necessarily need to purchase roadside assistance from the rental car company if coverage is being provided through your personal car insurance, credit card, or an auto club.
Generally, your car insurance can cover rental cars, but it’s important to check properly for any exclusions. Meet with your provider and credit card company to confirm what coverage you already have before you rent a car.
However, if you only have minimum insurance, you can consider increasing your rental car coverage. Repairing or replacing a rental car can be quite on the high side, and purchasing a collision damage waiver is always worth the extra expense.
