Do I Need Insurance to Rent a Car?

August 22, 2019

If you rent a car, you want proper coverage should you get involved in a car accident. Before you purchase extra car insurance for your rental, though, you should know if you need it. Some insurance plans cover your rental car or you may even have coverage elsewhere.

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Look at Your Policy

If you own a car that you use for personal use, check your insurance policy to see if it extends to rental cars. Many insurance policies extend to rental cars as long as you use the rental car for personal use and not business.

Knowing that your personal coverage carries over may not be enough, though. Take a closer look at your coverage to see if you need to supplement anywhere:

  • Liability coverage – Look at the amount of liability coverage you carry. By law, you have to carry liability insurance if you drive a car. Just make sure the amount is high enough to make you comfortable while driving the rental car.
  • Comprehensive coverage – This covers the car against anything non-accident related, such as theft or vandalism. Again, make sure you have enough coverage given the type of car you rent. If your personal car isn’t worth much, you may need supplemental comprehensive coverage to make up for the gap.
  • Collision coverage – This covers any damage to the car you drive if you cause an accident. Make sure you have enough coverage for the type of car you rent. If your personal car isn’t worth much, you may not have much collision coverage on your personal policy.

Do You Have Health Insurance?

If you have health insurance, you probably don’t need personal accident insurance from the rental company. If it makes you feel better, check your health insurance deductible and coverages to make sure you will be covered. Typically, it’s double coverage to pay for personal accident insurance if you carry decent health insurance.

Do You Have Homeowner’s Insurance?

If you own or rent a home and have insurance for your personal belongings, they should be covered even in your rental car. The rental company may try to sell you personal effects insurance, but as long as you aren’t driving with any extreme valuables, your homeowner’s insurance should cover it.

Do You have a Credit Card?

If you use a credit card to pay for the rental car, your credit card company may provide insurance for the rental. The coverage provided may not be enough to rely on alone, but combined with your auto insurance or the insurance you buy from the rental company, you should be well covered.

Call your credit card company or look up your benefits online. Pay close attention to the amount of time the credit card will provide rental car insurance (sometimes it’s 15 or 30 days max). Also, look closely at the amount of collision coverage, as it is usually less than many people want.

Insurance provided by a credit card company should be supplemental insurance – not your primary insurance that you rely on should something happen.

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What Rental Companies Offer

Rental companies offer a variety of coverages to protect their car and yourself while you drive it. Understanding your options will help you make an informed, rather than a hasty decision:

Loss-damage waiver – This protection covers the car’s damage if in an accident or stolen. It waives the loss of use fee the rental company would charge for the time they are unable to rent the car to others (loss of use).

Liability – Most states require you to have liability insurance to cover damages you cause to other property with the rental car.

Personal accident insurance – Covers your medical costs should you get in an accident with the rental car and suffer medical issues.

Personal effects insurance – Covers your personal belongings that you carry in the rental car should they be lost or stolen.

Only some people will need to consider the insurance offered by rental companies including:

  • Renters that don’t have a personal vehicle
  • Drivers renting for business purposes
  • Drivers renting a car in another country
  • You just want the reassurance of extra insurance

Protecting yourself while driving a rental car is important. Ask the right questions of your insurance agent, credit card, and the rental company to find the perfect combination of policies to provide the coverage you need.

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