Does My Auto Insurance Policy Cover a Rental Car?
Depending on your auto policy coverage, you may be covered for a rental car if your car is damaged in an accident. If you carry comprehensive, collision and liability coverage on your own vehicle, the coverage will most likely extend to the rental car as well.
The same is true when you rent a car for business or travel. Compare car insurance rates with collision and coverage added on to see what the lowest rates are in your area.
What if I Only Have Liability Insurance on My Car Insurance Policy?
If you only carry liability coverage or the state minimum, you should consider buying collision and comprehensive from your car insurance company. You can get a free car insurance quote to not only see what it would cost to add rental car insurance but also to see if you can save money on your car insurance policy altogether. On average, shoppers save over 30% in their annual car insurance costs by shopping with SmartFinancial.
Other Rental Car Insurance Options
You also have the option of buying a standalone policy from a company, like Allianz Global Assistance. Also, if you have a travel insurance plan, it's a good idea to see if your plan will cover rental cars before you buy additional rental car insurance. You can also buy a collision damage waiver at the rental car counter if your credit card company doesn't extend enough coverage in case of an accident.
Collision Damage Waiver
Standalone policies are often expensive but the rental companies are usually even more expensive. It's a good idea to call each of your credit card companies to see what kind of rental car insurance they would extend if you use their card for a rental car if you don't want to add the coverage to your policy for the full six months.
Below, you'll find more information about rental companies and how your personal auto policy may give you access to adequate protection in case of an accident in a rental car. Does rental car insurance cover more than your existing policy? Let's look and see.
Comprehensive and Collision Coverage
Comprehensive and collision coverage pays for damages to the car you own or are renting from at-fault accidents, glass damage, theft, falling objects, hail and more. If you do not have collision and comprehensive insurance on your personal auto insurance policy, you will not be covered with a rental car either.
Keep in mind that even when you have full coverage auto insurance, you're subject to a deductible, so you'll have to pay that amount before your car insurance company pays for repairs if you were at-fault.
Deductibles are the amount you agreed to pay first in order for the insurance company to cover the rest. Deductibles range from $250 to $1,000. The higher the deductible, the lower your monthly payments. The lower the deductible, the more you pay each month.
If you were not at fault in a car accident, the other driver's insurance company would be responsible for the damages to the rental car and for your injuries and the injuries of your passengers.
If the driver was uninsured, your uninsured/underinsured motorist coverage on your auto insurance policy would cover the damages. Do you have these types of coverages?
Do I Need Rental Car Insurance?
The most common question about rental cars is whether or not drivers should buy the rental car company's rental car insurance coverage. This loss damage waiver, also called collision damage waiver, covers the same incidents as comprehensive and collision insurance but you don't need to buy it unless you don't have collision and comprehensive coverage on your car.
So, instead of googling about whether or not you're covered (as many Americans do come vacation time), contact your insurance agent and find out how much protection you have if you busted up a rental car. Ask if you have coverage if an uninsured driver hits you in that rental car.
Does Auto Insurance Pay for Rental Cars?
Another common question is "Will my auto insurance pay for a rental car?" It's a good question too. You are not covered for a vacation or business rental. You may be covered if you need a rental car because yours is in the shop due to a reported accident. This coverage must be specified in your policy if you have full coverage, with maximum daily rates.
It's a good idea to do an annual review with your insurance agent if these are scenarios for which you want coverage. It's the perfect time to ask if a rental car is covered by your auto insurance policy if you're in an accident. If you have liability coverage only, chances are that it's not.
Your Personal Auto Insurance Policy
Your personal auto insurance policy will not only cover damages but also injuries that you may cause in the rental car. If you injured another driver, their passengers or pedestrians you are covered for their medical expenses with your liability coverage. However, you'd be on your own with damages to your car if you didn't have collision insurance.
You're also covered if you damage someone's personal property with the rental car, if you have liability insurance coverage, which is required by law if you own a car.
Remember, you only need to buy the rental car company's supplemental liability if you have a low liability limit, but it's generally less expensive to increase your limits on your personal auto insurance policy instead.
What if My Passengers Are Injured in the Rental Car?
If you or your passengers are injured in a rental car, you will only be covered if you have medical payments or personal injury protection (PIP) on your personal auto insurance policy. These coverages are often optional. PIP is required in some states. If you do not have these coverages on your existing policy, you may consider adding medical payments coverage to your policy or buying personal accident insurance from the rental company, the most expensive option of the two.
There are reasons to consider buying rental insurance from the car rental company. For one, you won't have to pay a deductible if you do have an accident. You also would not be raising your rate by filing an auto insurance accident claim if you do have an accident in the rental. Plus, if you don't have medical payments or collision and comprehensive, it's nice to be assured that you have the right coverage in the rental car.
Need Rental Car Insurance Added to Your Existing Policy?
Just enter your zip code on this page, and SmartFinancial will put you in touch with a licensed insurance agent in your area who will review your existing coverage before giving you a list of options for a rental car. You may even save hundreds of dollars a year with a brand-new auto insurance policy. The service is 100% free.
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