Rental Car Insurance Coverage

Whenever your rent a vehicle, you assume a risk. If you cause injuries or property damage, you can be financially liable. That is why rental care insurance is a must-have product if you choose to rent a car, whether your need it for leisure or business. Following are listings on how rental car insurance coverage is used to protect the driver.

Don’t forget that you don’t have to buy your rental car insurance from the rental car company. You may want to get rental car insurance from other sources. In fact, you might already be insured through your credit card company or your regular auto insurance.

Protecting Your Car from Physical Damages and Theft

Rental auto insurance is different than regular auto insurance when it comes to comprehensive and collision protection. While auto insurance companies may provide comprehensive and collision coverage, rental auto insurance protects the driver through what is known as a loss damage waiver (LDW). It can extend this coverage, as well, to a collision damage waiver (CDW). If the rental car is damaged or stolen, the rental car company assumes the cost.

In these instances, you are protecting yourself from the obligation of repaying for loss or damages. However, that does not mean you can abuse the privilege of driving the rental car. Buying a waiver to stay protected will not go far if you speed, drive while inebriated, or drive recklessly on unpaved roadways. Any of these activities could automatically void the waiver. Therefore, you should always scrutinize the fine print of your rental car insurance policy.

Rental Car Insurance and Liability Coverage

When you purchase auto insurance, you instantly are covered for liability. At the rental car counter, you add this protection in a supplemental form. When you take out regular liability insurance for your car, it reimburses other parties for the damage you caused when driving. This same coverage stays intact when you rent a vehicle. Any excess liability under an umbrella policy can also be used for a rental car.

The rental auto insurance equivalent is a supplemental form of liability protection. In this case, you usually can buy as much as $1 million worth of coverage. Some companies even provide extended supplemental protection with higher amounts of protection, or up to $2 million worth of coverage.

If you do not own a vehicle and do not carry non-owner auto coverage, you should buy the liability protection. If you regularly rent rental vehicles, you should consider purchasing a non-owner policy – a plan that can provide more protection at a more affordable cost.

Personal Accident Protection

You can also buy rental car insurance in the form of personal accident insurance. If you buy regular auto insurance, this type of protection equates to MedPay or personal injury protection (PIP). For example, if you are injured in a vehicle accident in your car, your medical costs may be paid by health insurance or PIP coverage. Any medical expenses for passengers may be paid by a MedPay plan. This protection covers funeral expenses as well.

Rental car companies provide personal accident insurance, which is used to cover the medical costs you and your passengers must assume if you are involved in a car crash. These costs include the expenses involved with ambulance transport, medical care, or death benefits.

Personal Effects Coverage

If you have rental insurance or homeowner’s insurance, your personal items are covered when you are away from home. Off-premises coverage is typically limited to a certain percentage of your total protection. If you do not have either homeowner’s insurance or rental insurance, you may want to include personal effects coverage from a rental car company. Personal effects plans reimburse you to a specific amount if items are stolen from your auto.

Should You Buy Rental Car Insurance?

Not everyone needs rental car insurance. When making a decision for this type of protection, plan on buying the insurance in the following instances:

You do not own a vehicle and do not possess a non-owner auto insurance plan. This can be a temporary measure of if you rent cars frequently. Buying a non-owner auto insurance plan is a better option.
You have the minimum coverage for liability required in your state and it is under the minimum requirement for the state where you are traveling.
Your insurance company limits your coverage if you rent a car for longer than a week.
If your insurance company restricts your insurance protection when your trip concerns business.
Your insurance plan will not cover all the costs imposed by the rental agency if you are involved in an accident.
You are traveling with expensive items that are not covered under a renter’s or homeowner’s plan.
Your deductible is high on your regular auto policy, which, in turn, makes a CDW a necessity.
You have been categorized as a high-risk auto driver and do not want to make another claim with your regular auto insurer.

You can rent car insurance from the rental car company or choose a standalone rental policy if you feel the rates offered by the agency are too high.