Anyone who has rented a car has probably heard salespeople at the counter caution them about the potential repercussions of leaving without purchasing their company’s rental car insurance. On the spot, you might not be certain of the specific coverage you already have. Along with the commissions they receive for selling you the coverage, rental companies are relying on that.
Recall that rental car reimbursement coverage, a popular auto policy choice that pays for a rental car if your vehicle needs to be repaired as part of a claim, is distinct from rental car insurance.
Before you arrive at the rental counter, the information provided below will assist you in determining whether you require rental car insurance and how to obtain it.
To rent a car, do you need insurance?
No, in order to hire a car you do not need to have your own auto insurance policy. On the other hand, rental companies often just have bare minimum coverage on their cars. If you have a rental car accident and don’t have your own auto insurance, you may be forced to pay a sizable amount of money.
Purchasing supplementary insurance from the rental car business, paying for coverage with a credit card, or obtaining a stand-alone policy from a third party are further choices.
Car insurance – does it cover rental cars?
If you use a rented car only for personal purposes, your auto insurance policy will typically offer comparable coverage for it. For instance, if you have comprehensive and collision insurance, your rental car would probably be covered if it is damaged, stolen, or totalled, provided that the rental has a value comparable to your own car. If you submit a claim to your insurer, your deductible, which is a fixed sum deducted from the claim settlement, will still be in effect.
Up to the limits of your policy, liability insurance covers any injuries or property damage you may cause to another person in a collision. Both your own injuries and any damage to your rented car are not covered.
You can purchase a loss-damage waiver, or LDW, from the rental business if you don’t have comprehensive or collision coverage, are renting a luxury vehicle that your insurer won’t cover, or if you are renting a vehicle that isn’t covered by those policies. In exchange for adhering to the terms of your rental agreement, an LDW releases you from financial liability for the rental car in the event that it is stolen or destroyed.
Comparing your own auto insurance with that of a rental car
Here are the typical insurance options offered by rental car companies, along with instructions on how to check to see whether you already have coverage under your own auto insurance policy.
car theft and collisions
The counter: If the rental car is damaged or stolen, you are not responsible thanks to a loss-damage waiver, commonly known as a collision damage waiver (CDW). A waiver that states the rental car company won’t pursue you instead of insurance is technically what it is.
Your policy: If you have collision and comprehensive coverage on your own policy and you rent a car within the United States or Canada, your coverage will typically extend to the rental vehicle as well. You will yet be liable for your deductible, and making a claim under your auto insurance policy can result in a rise in your premium.
You would be responsible for paying for the damage unless you purchased LDW if your regular policy does not include comprehensive and collision coverage or if you are renting in an area where this coverage is not available.
You harm other people.
The counter: Additional liability insurance will cover any damage to other people’s property or vehicles that you cause. The usual upper limits are between $300,000 and $1 million. You should purchase this if you don’t have auto insurance (such as if you don’t own a car) or if you’re visiting a place where your own policy doesn’t provide coverage.
Your personal policy: Driving a rental car within the United States or Canada is normally covered by your own liability insurance. You could add the extra protection to your auto policy to increase your coverage if it just has basic liability coverage.