Car rental agencies offer their customers auto insurance packages to cover their rental vehicle. These packages can be confusing and expensive, and many people wonder if they need to buy rental car insurance at all.
Insurance Requirements for Rental Cars
Unlike when driving your own car, you do not need to carry proof of insurance when driving a rented vehicle. However, if you have an accident in a rental car and do not have insurance to cover the damages, you are personally liable for all costs. Rental car agencies have fleet auto insurance on all of their vehicles, but this does not stop them from seeking damages from you in the event of an accident. Also, you, your passengers, and your possessions are not covered by the rental agency’s insurance policy.
Check If You Have Existing Coverage
There are a variety of ways in which you may already be insured when renting a vehicle, but there may be limits or restrictions on what is covered. Check to see if you already have rental car insurance coverage (and what that coverage is) with the following:
Personal Auto Insurance Coverage
The auto insurance policy that covers your own car may provide you with coverage for a rented car. Check with the insurance company in advance to be sure. If there are gaps in the coverage, you may want to buy a supplemental policy from the rental car company to cover the gaps. You may also want to consider supplemental insurance if your policy has low limits on coverage or high deductibles.
Credit Card Coverage
Credit cards sometimes offer insurance protection when you rent a car. This service is becoming less common, so be sure to check with your credit card company ahead of time. Credit card auto insurance usually only covers the rental of passenger cars, and not rental of moving vans and trucks, and to activate the coverage you will probably need to pay for the rental using that specific card.
Other Insurance Coverage
Homeowner and renter’s insurance policies also sometimes include insurance coverage for rental cars. The coverage can be very limited though, so check the small print in advance to know what is and isn’t covered.
Types of Supplemental Car Insurance
If you do buy insurance from a rental car company or choose to augment your personal policy, be aware of the different kinds of supplemental car insurance available. When combined with coverage offered by your insurance carrier or credit card, you may need none or only some of these supplemental coverage options:
Collision or Loss Damage Waiver: Protects you against liability for damage to the rental.
Personal Accident Insurance: Covers you for injury to yourself or your passengers.
Liability Insurance: Protects you against lawsuits for causing damage or injuries to property or people.
Personal Effects Insurance: Coverage if personal possessions in the vehicle are stolen or destroyed.
You do not have to buy the insurance offered by a rental car agency, but you should always be certain another policy covers you before you decline it. Getting caught out in an accident without insurance can be extremely costly.