Rental Car Insurance, Do you need it?

on February 23, 2017 Insurance Articles with 0 comments

First things First: Does Personal Car Insurance Cover a Rental Car?

The first question most people wonder when deciding whether or not to buy rental car insurance is, does their own car insurance cover a rental car?  To answer that, the limits and deductibles on your regular car insurance policy typically still apply to your rental car so long as you drive it for personal use.  If it’s a commercial or business rental, your personal car insurance coverage may not apply.  However, it is still a good idea to check your policy or call your insurance company to find out which coverages extend to a rental car.

Know Your at-the-Counter Options

There are generally 4 options available when you rent a car:

  1. Loss-Damage waiver (aka collision damage)- This will waive financial responsibility if the rental car is damaged or stolen.
  2. Liability coverage- state required coverage protects you from potential lawsuits
  3. Personal Accident Insurance- Covers medical costs after an accident
  4. Personal effects coverage- Insures what you keep in the rental car

Know your Insurance Policies:

If you have reliable car insurance, renters/home insurance, and health insurance, you can save a lot of money by declining rental insurance

  • Loss-damage waiver offers the most protection, however, if you already have comprehensive and collision coverage on your car insurance policy, the value of your rental car is likely covered in the event of a total loss.  Make sure to check that you have adequate limits on your comprehensive and collision coverage to cover the cost of the rental car.  In the case of an accident, your deductible would still apply.
  • Liability coverage- this is a state mandated coverage on all auto insurance policies.  You likely should not need to add this at the counter
  • Personal Accident Insurance- If your health insurance covers accident related injuries, consider declining this coverage.  You also may have personal injury protection or medical payments coverage on your auto insurance policy.  Check with your agent for details on your policy
  • Finally, Personal Effects coverage- If you have renters or homeowners insurance with off premises coverage, your things are already insured before you stash them in a rental car.

When Rental Car Insurance Coverage is Needed

  • If you’re not currently insured, you will need liability coverage.  Adding all four options would be a good idea in this case, however is not legally required.
  • If your current policy doesn’t have comprehensive and collision coverage
  • If you’re only insured under a commercial car insurance policy
  • You don’t want to risk paying a high deductible
  • If you are traveling out of the country

*Picture taken from Pensacola Car Rental