When you rent a car for a family vacation or a road trip with friends, they’ll ask at the counter if you want to buy car insurance from them.
But do you need rental car insurance to be properly covered? Your first instinct might be to go ahead and agree to it so you don’t run into problems. You wouldn’t want to drive illegally, or not be covered if something happened.
But there’s a chance that you’re already covered by your current car insurance policy.
So how does car insurance work when it comes to rental cars? Let’s take a look at the insurance options from rental companies. There’s a chance you’re covered already.
What kind of car insurance do rental car companies offer?
Rental companies offer a number of insurance options.
Some of the most common ones are:
- Loss/collision damage waiver: It covers costs if your rental car is stolen, damaged in an accident, or vandalized.
- Liability/supplemental liability insurance: This covers you if you cause damage to other vehicles or property while driving the rental car. It can also pay for medical expenses for the other driver and their passengers if you’re at fault in an accident.
- Personal accident insurance: This pays for medical bills for you and your passengers if you’re in a car crash while driving the rental car.
- Personal effects coverage: It covers you if personal items are stolen from or damaged in your rental car.
How much does rental car insurance cost?
You can expect to pay anywhere from $10 to $30 per day.
And you can pay even more depending on the coverage you choose. It can add up quickly if you plan on renting for a longer period of time.
Does my car insurance cover rental cars?
Rental car insurance could overlap with your own auto insurance. In general, the coverage you have from your primary auto insurance will cover a rental vehicle.
For example, when it comes to liability insurance, if you cause an accident while driving the rental car, your liability insurance would pay up to your policy limits for the damages done to other cars or property.
To determine if your car insurance covers rental cars, here are five things to consider before you sign up and pay for coverage you might not need.
1. How much liability coverage do you have?
Liability coverage is required in almost all states, so you should have it. This pays for the other driver’s injuries if you’re at fault in an accident. It also covers damage you cause to other vehicles and property.
As long as you have a level of coverage that you’re comfortable with, you can usually skip on purchasing the supplemental liability coverage.
But if you only have the state minimum limits for liability, it might be wise to buy the supplemental coverage for that extra protection. It’ll ensure that you’re properly covered if you get into a car accident.
2. Do you have full coverage?
If you have full coverage, it means you have comprehensive and collision on your car insurance policy.
Collision insurance pays for damage from situations when you’re driving. For example, if you hit a car or you hit an object.
On the other hand, comprehensive insurance covers damages to your car that are outside of driving situations. That could mean weather damage, fire, or theft.
Depending on the insurer, full coverage may or may not extend to cover rental cars. So it’s a good idea to clarify with your insurance company beforehand.
If you’re not sure if the coverages extend to your rental car or you don’t have full coverage, you could consider going with the rental company’s loss damage waiver.
But if you have full coverage and decline, there’s a catch. The rental car company could potentially charge you for loss of use if you damage the car. The fees they collect recover money they lost out on while repairing the vehicle.
3. Do you have PIP or MedPay?
You probably don’t need to get the rental company’s personal accident insurance if you’ve got health insurance. This is especially true if you have personal injury protection (PIP) or medical payments (MedPay) through your car insurance.
PIP insurance and MedPay are very similar. They both cover medical care that you’ve received as a result of an injury from a car accident.
The main difference is that PIP is more comprehensive. PIP provides coverage for immediate relatives and people under the same insurance policy as you. MedPay only pays for your medical bills and no one else.
4. Do you have homeowners or renters insurance?
Comprehensive insurance applies if the actual car is stolen. But it won’t cover personal items left in the car.
But if you have homeowners or renters insurance, your stuff will be covered. You should be able to decline the rental company’s coverage.
5. Does your credit card cover rental car insurance?
Credit cards are another option when it comes to rental car insurance.
Finding out if you have additional coverage is as easy as calling the 1-800 number on the back of the card to ask.
If your credit card comes with rental car insurance, keep in mind a few questions you should ask the issuer:
- If there’s rental car insurance, how do you get the coverage from your credit card?
- Is the coverage primary or secondary?
- What’s included and what’s excluded in the coverage?
- How long will the rental be covered for?
Coverage depends on the company as well as the card you have with them. For example, American Express only reimburses for losses or expenses not covered by other insurance plans. Acting as secondary coverage, members have limited coverage for theft or damage to the rental, medical expenses, and personal effects.
Do some research, grab the right card from your wallet, and you’ll get a little extra protection on the next car rental you buy on a credit card.
When should you opt for rental car insurance?
Sometimes it’s worth it to buy rental car insurance. This depends on if you:
- Don’t have insurance because you don’t own a car
- Have insurance that comes with low coverage limits
- Want peace of mind and don’t mind the additional cost
It’s up to you to do your research before renting a car.
Knowing how much your auto policy covers for a rental car will prevent you from signing on for coverage from the rental car company that you don’t need. It’ll save you money from paying for the same coverage twice.
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