Do You Need Rental Car Insurance?
Not sure if you need rental car insurance? You’re not alone. Many drivers don’t know if their personal auto policy provides adequate coverage or if they should purchase insurance at the counter.
Before renting
Contact your insurance company. Find out how much coverage you have and if it includes rental cars. The coverage and deductibles you have on your auto insurance policy apply in most cases when you rent a car, as long as it’s for personal use and you are driving in the U.S.
Contact your credit card company. If paying for a rental car with a credit card, you may have some level of insurance coverage. Call the number on the back of your credit card to find out what the terms are and what coverage you have. In most cases, credit card benefits are secondary coverage. If an accident occurs, you will still need to file a claim with your insurance company, and your credit card company may pay a portion of the charges that your primary auto insurance company does not.
Using a car sharing program? If you plan to rent through a car sharing program such as Zipcar, find out ahead of time what insurance is offered, as it can vary from company to company.
Traveling for work? Ask your employer for guidance on whether or not to get rental car insurance.
At the rental counter
The Insurance Information Institute cites four typical rental car coverage options, which can vary from state to state:
Loss damage waiver: Also known as a collision damage waiver, this waives financial responsibility if your rental car is damaged or stolen. It also provides coverage for “loss of use” charges if the rental is being fixed or if it is towed. If you have comprehensive/collision auto coverage, you may already have coverage for damage to a rental car, subject to policy provisions and deductibles.
Liability insurance: This is a state-required minimum amount of liability coverage, however, these coverages may not provide a lot of protection. A standard auto insurance policy typically includes liability coverage.
Personal accident insurance: This will cover the driver and passenger(s) for medical costs caused by a car accident, regardless of fault. The personal injury protection portion of your auto insurance policy, or your health insurance policy, may cover your medical expenses.
Personal effects coverage: This provides protection for personal items kept in a rental car. Your homeowners or renters insurance policy may include off-premises theft coverage.