Does my auto insurance cover rental cars?

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Here's what you need to know...
  • Your existing car insurance will cover a rental vehicle
  • Your rental car will be protected with the same level of coverage as your personal vehicle – make sure it’s enough
  • Other coverage options include a policy from the rental company and policies possibly included in your credit card

The answer to the question, “Does car insurance cover rental vehicles,” is yesin most cases. You can also get rental insurance coverage as a benefit from your credit card company or the rental agency itself.

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Your existing car insurance policy will usually extend to rented vehicles.

If you rent a car, you would have the same type and level of coverage on it that you have on your personal vehicle.

Rental Car Insurance Under Your Own Policy

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If you have collision coverage in place, you would be covered for damage to the rental car, but you would have to pay your usual deductible first. Make sure your existing policy covers these three types of insurance before deciding it will be adequate for a rental car.

  • Liability – In a situation where you are involved in an accident and are determined to be the at-fault driver, the liability portion of your policy will be used to pay for the damages (up to your policy limit).
  • Collision –  If your vehicle is an older one and you have dropped your collision coverage, your rental car will not be protected. You must have collision insurance to drive a rental car, so you will have to add it.
  • Comprehensive – If have limited your comprehensive protection to fire and theft only, you will not be adequately protected when you rent a car.

Not everyone who has a driver’s license also owns a vehicle, and if this situation applies to you, you will need to consider another method of insuring the rental car than using an existing policy, such as a nonowner’s car insurance policy.

Rental Car Insurance from the Agency

The car renal agency will offer you coverage as a standard procedure when you arrive to pick up the vehicle. You will need to sign or initial the document specifically indicating that you wish to decline the coverage if that’s what you decide to do.

  • You can choose to buy this coverage to top up your existing car insurance coverage if you are concerned that your existing coverage may not be enough to fully protect you if you are the at-fault driver in a serious car accident.
    • For a few dollars a day, you can buy an additional level of protection that will provide up to $1 million in liability insurance coverage.
  • If you decide to buy car insurance coverage from the rental agency, this policy is considered your main coverage while you are operating the rented vehicle. If a loss occurs, the claim will be paid out of this policy first.
  • Your personal car insurance policy would be used if the car rental agency’s coverage is not enough to fully satisfy the claim for damages.

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In a case where you don’t have collision or comprehensive coverage on your vehicle, buying the Loss Damage Waivers or Collision Damage Waivers coverage offered by the car rental company will give your the proper protection.

You may have to pay a deductible before this coverage will kick in, so be sure to ask whether that’s the case before you agree to take this protection.

Rental Car Insurance Through Your Credit Card

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Your credit card company may offer rental car insurance as a benefit to customers. This is another option to consider. To find out what type and level of coverage you have, contact your credit card issuer to ask about the particulars of the plan.

This is an option to consider for drivers who don’t have an existing car insurance policy in place. Depending on the particulars of the credit card company plan, it could be worth using since you already have it as a benefit with your card.

Before you make a decision about rental car insurance coverage, think about what type and level of protection you already have in place. You will want to avoid buying duplicate coverage, but if there are gaps in your level of protection you can deal with them appropriately.

No one wants to think about getting into an accident while driving a rental car, but you should take just as much care in putting protection in place in this situation as if you were buying a new vehicle.

Car insurance protection is too important to skimp on coverage.

A call to your current car insurance provider will confirm what type and level of protection you currently have in place and whether your coverage extends to rental cars.

From there, you can look at your other options for rental car insurance and make sure you have enough protection in place.

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