Planning a trip is fun and exciting, but not so much when it comes to the technical parts like insurance. While there are many auto coverages, you must know if you are covered when getting a rental car. Here is when you start scratching your head and asking yourself, does my auto insurance cover rental cars? Being informed before heading to the car rental agency will save you some headaches. Here is the basic information you need to know about car rental insurance.
Does Car Insurance Cover Rental Cars?
If you rent a car, your standard auto insurance will most likely cover the rented car. In other words, buying car rental insurance may not be necessary as you already have coverage. However, this also depends on your current policy. After all, you want to ensure you are adequately covered should anything happen.
Take a situation where you have rented a car for a road trip. The coverage you have on your vehicle is the same coverage that extends to the rental vehicle. So, if you have insured your car with comprehensive and collision coverage, these are the coverage options that extend to the rental.
If you rent a car of similar value to yours, your auto insurance coverage is most likely enough. However, reconsider insurance if you have rented something fancy like a Corvette Stingray while your Subaru Forester is at home. That is because the values of these two cars differ. If anything happens to the corvette, your auto insurance will not be enough to pay for the damages. So to answer the question, does my auto insurance cover rental cars? Yes, it does. The major question should be whether it offers adequate protection to the rented car.
Methods of Insuring a Rental Car
There are several methods you can use to insure a rental car. Here are some of them.
Insure the Car Directly With the Rental Agency
When booking a rental car, buy the coverage they are offering as well. Technically, this is not exactly insurance. Car rental agencies refer to it as a waiver. This means that the company will not charge you for any damage that happens to the car. The major advantage is that if anything happens to the car, you will not follow up on any claim. On the flip side, this cover can be costly compared to buying it from a third-party insurer or comparison site.
Insure Online When Booking
When booking a rental car through a broker or comparison site, you can compare the pricing of different companies. You can then buy extra insurance once you find the best deal on a rental vehicle. This arrangement can be made from the comfort of your home, hence saving you on time. In addition, the price is usually lower than buying directly from a rental company. Keep in mind that if the car is damaged in an accident, you must pay the rental agency first. That means spending money out of pocket, then claiming it later with your insurance company.
Through Your Credit Card
Another option for insuring your rental car is through your credit card company. According to the Insurance Information Institute (III), you can get extra insurance if you pay the agency using your card. Premium credit cards include primary coverage. That means it comes with high limits and can cover the entire claim. Because your insurance company will not be paying for the damages, they will not know about the accident. Consequently, your premium rates will stay the same.
Standard cards, on the other hand, include secondary coverage. They have a lower limit, and you first have to file a claim with your company. It is only after you have exhausted your standard policy that you use insurance from your credit card company.
Insure Through a Third-Party Insurer
You can also purchase coverage from a third-party insurance company. You have various options tailored specifically for car hire.
What is Better Between Normal Car Insurance and the Prices and Policies Offered by Rental Car Services?
There is no good or bad when it comes to these two. It all depends on your circumstances. Here is a comparison of some insurance options that will make it easy for you to decide.
Personal Bodily Injury
- Your policy. If you have medical payments coverage, your policy will cover your injuries. This is as long you are within the coverage space.
- Rental insurance. This insurance also covers medical expenses for you and your passengers after an accident. This includes medical care and ambulance rides.
Theft and Crashes
- Your policy. If you already have a collision or comprehensive coverage on your car, it extends to the rental car. However, you will have to file a claim with the insurance company to pay for the damages. That means your premiums could go up.
- Rental insurance. Rental companies offer a collision damage waiver or a loss-damage waiver. This gets you off the hook for any damage, and the rental company will not come after you.
Personal Property
- Your policy: A renters insurance policy or homeowners’ policy helps cover your possession if stolen while in the vehicle.
- Rental insurance: This coverage will help pay for any damage to personal property in the car, but up to a certain amount.
Damage to Other People
- Your policy: A liability insurance coverage helps cover you for any damage you do to other people. If it is adequate, you can skip rental insurance.
- Rental insurance: Supplemental liability offers protection for any damage you cause to other people’s vehicles or property. Usually, the liability limit is between 300,000 to $1 million. If you do not have an auto insurance policy, you need to buy it.
What Does a Rental Insurance Policy Cover?
When buying car rental insurance, here are the offerings you can expect.
Collision/ Loss Damage Waiver
This waiver, which is often referred to as LDW or CDW, is technically not insurance. However, it protects you from paying for any damage to the vehicle after an accident or if it is robbed. This waiver does not extend to an accident caused due to reckless driving. Your comprehensive or collision coverage offers the same benefits as CDW or LDW.
Liability Coverage
This coverage protects you when you injure someone or damage their property. If you have adequate liability coverage, you may not have to buy this policy.
Personal Accidents Insurance
The personal accident insurance covers medical expenses for you and your passengers after an accident in a rental car.
Personal Effect Coverage
This coverage protects your personal belongings like devices, clothing, and jewelry if stolen from the rental vehicle.
You can talk to an agent if you are still asking yourself does my auto insurance cover rental cars. They will inform you about limits, and then you can gauge if you need to purchase rental car insurance.
Which Insurance Companies Cover Rental Cars
If you do not want to use the rental car coverage, there are companies selling standalone policies for rental cars. Here are some of these companies.
Bonzah
This company sells car rental insurance for about $7.99 per day. It also pays up to $35,000 to repair or replace the car. Since it is primary insurance, it often pays out before your insurer. Generally, the policies cover traveling abroad. Still, it is also recommended to check the fine print to be sure.
Rental Cover
This company offers no-deductible policies that are categorized as primary coverage. That means you are not required to first make a claim to your auto insurer. Coverage options vary by state. Also, the company has not listed its price on the website. However, they claim to be more affordable than buying coverage from a car rental company.
Allianz Global Assistance
Allianz Global Assistance sells car rental insurance for about $11 and pays up to $75,000 for loss and damages. As this is primary coverage, it pays out before your standard auto insurance. It also comes with 24-hour emergency assistance.
Insure My Rental Car
Insure my Rental Car covers damages to your rental car of up to $100,000 at a fee of $9.75 a day. Because the policy offers primary coverage, it means you might not have to use your auto insurance first.
Sure
Sure offers coverage of up to $100,000 for any damage to the vehicle. The cover also includes lost keys and flat tires, and you can find an online quote from their website.
Is it Worth it to Own Rental insurance?
If you already carry auto insurance, then rental car coverage may not be necessary. Still, here are a few instances that can make rental car coverage necessary.
- You want to stay away from filing a claim on your policy
- You lack collisions or comprehensive coverage.
- The deductible on your policy is high.
- You are traveling outside your coverage territory
- Your liability coverage limit is low.