Do I need rental car insurance?

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In a nutshell...
  • Some insurance policies do not extend liability to other vehicles
  • If you are renting the car for business purposes, your insurance may not cover it
  • Without collision, the rental car would not be covered for damages

Whether you are renting a car for a vacation, business trip, or because yours is in the shop, you will be offered rental insurance. Every car rental company offers it, but do you need it?

Understand that accidents happen every day and, if you are in one with a rental car, you will be held responsible for the damage.

You are also liable for any medical bills for you and any passengers in the car. If the accident was your fault, you could be responsible for the other vehicle and its passengers.

Before you rent a car, you need to find out if you are covered because, if not, purchasing rental coverage may be the right answer.

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What types of insurance do rental car companies offer?

To figure out if you need rental insurance you need to understand what it covers.

There are four main types of coverage offered which may be sold individually or bundled into packages:

  • Collision Damage Waiver – This covers your financial responsibility for any car damage if you have an accident or a victim of vandalism or theft. It usually costs $9-20 a day
  • Supplemental Liability Insurance – Liability insurance covers the other car and passengers if you are at fault in an accident. This coverage can be up to $1 million and costs $7-9 a day
  • Personal Accident Insurance – This covers any medical expenses for you and your passengers resulting from an accident. It can cost $3-5 a day
  • Personal Effects Coverage – This covers any personal items in the vehicle that are damaged or lost because of theft, vandalism, or an accident

As you can see, these fees can add up, so it is essential to find out what you need and what you may already have. Rental companies may have additional offers.

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Do you already have car insurance?

If you already have car insurance, it may cover rental cars. For instance, some people drop collision to save money.

If your policy does not extend to rental cars, then you will be responsible for damages to the other vehicle and passengers.

If you are renting the car for business purposes, your insurance may not cover it. For business trips, you may need to have your employer check company auto insurance policies.

Another thing you need to consider is where you will be renting the car. Some policies may only cover you if you are in the United States.

A final consideration is for additional services such as towing. These may be cheaper to add to your policy than to purchase from the rental agency.

Will my credit card company cover the car?

Many credit cards offer rental car protection, but what does this mean?

Credit card coverage may not be as cut and dry, as it seems. They may not cover fees, such as loss of use that rental agencies charge.

Some credit cards only offer what is referred to as secondary insurance. This means they only cover what is not covered by your primary insurance.

When deciding whether credit card coverage is enough, you should always get their policy in writing to read over. Also, make a list of questions to ask when you call to verify your coverage.

What about personal accident insurance?

Remember this insurance covers medical expenses if you are an accident. In this case, you need to look at your health insurance policy as well.

Do you and your passengers have health insurance? If so more than likely, it would cover medical bills form accident. You will still be responsible for any deductibles or co-pays though.

If you do not have health insurance or your deductibles are high, you may want to consider the benefits of personal accident insurance.

What about other types of vehicles?

While you may have enough coverage for rental cars, other types of vehicles may not be covered.

These include vehicles such as:

  • Moving Trucks
  • Boats
  • Motorcycles
  • Jet skis

In these cases, you may need to purchase coverage from the rental agency. It is always best to check before renting any vehicle if you are unsure of your coverage.

Having no coverage can be a costly risk. Enter your zip code below to get FREE car insurance quotes today!

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