Do you need car rental insurance if you rent a car? If you inquire about a car rental agency, they will tell you that you do. However, if you ask an insurance specialist, the answer is “maybe.”
In general, a personal auto insurance policy covers rental cars with the same coverage limitations as a personal auto insurance policy. However, check with your insurance agent to make sure you’ll be covered if you rent.
According to Jonathan Weinberg, CEO of the car rental website Auto Slash, “it’s crucial to note that not all personal auto insurance coverage protects you when renting.” “A lot of people do,” says the author, “but it’s crucial to double-check your rental coverage with your insurance agent or carrier ahead of time.”
When you hire a car, you are taking on the responsibility of a costly vehicle. For example, a Ford Fusion, one of Enterprise’s full-size automobiles, will run you back $23,170. Hertz has a GMC Yukon in its fleet that costs $50,600.
Car rental firms have fleet insurance for their vehicles, but this does not cover rented automobiles and trucks. When you rent a car, you must sign a paper acknowledging that you are responsible for the vehicle. That means you—or your insurance—are liable for whatever happens.
If you don’t have insurance and your car is totaled, a rental company will charge you $23,170 for the Fusion. Alternatively, the Yukon might be had for $50,600.
What Is Covered By Auto Insurance?
There are three major types of coverage that your personal auto insurance policy can provide for rentals:
If you damage someone else’s automobile or property, your car liability policy pays for the repairs. It also compensates others if you are at fault in an accident.
If your rental automobile is damaged, collision insurance pays for the repairs. Even if you’re at fault for the accident, this sort of insurance pays compensation. It also has a deductible, which is the portion of an insurance claim payment that is deducted.
If your rental car is destroyed by fire, vandalism, flood, or natural disaster, this sort of coverage will pay to repair it. It also includes coverage for vehicle theft. The deductible from your comprehensive coverage will be applied.
Is it, however, sufficient?
Zhaneta Gechev, the creator of One Stop Life Insurance and a former manager at a big vehicle insurance company, says, “It depends.” “Most insurance companies will cover any vehicle you rent for personal use, but double-check with your agent.” In other words, your auto insurance policy will protect you if you rent a car.
Be Aware of the Exclusions
Your personal auto insurance coverage may not cover the rental of trucks, vans, or luxury cars. Your motor insurance policy may be canceled if you rent for more than a month.
Loss of Use Charges Aren’t Covered by Auto Insurance
Your automobile rental company may charge a daily “loss of use” fee if you damage a rental car while it is in the shop for repairs.
Auto Insurance Is Unlikely to Work Outside the United States
Your auto insurance is unlikely to cover a rented car outside of the country.
According to Auto Slash’s Weinberg, “rental coverage normally only applies when you’re renting in the United States.” It’s worth noting that some countries, such as Ireland and Jamaica, require you to buy automobile rental insurance. If this is the case, the cost of insurance should be included in the rental car fee. Auto Europe presents a comprehensive list of insurance needs per country.
A Claim’s Consequences
If you make an insurance claim on your policy, there are a few other issues to consider, according to experts. If you file a collision or comprehensive insurance claim, you must pay the deductible. There’s a potential that your auto insurance prices will go up after that. That’s why many travelers prefer to file a claim using their credit card coverage, which keeps the claim off their insurance record.
Another approach to keeping your insurance record clean is to purchase the collision damage waiver offered by the rental agency (known as the CDW).
Getting Insurance from the Rental Car Company
Experts advise that even if you think you’re insured, you should purchase car rental insurance through your travel insurance policy or directly from the rental business.
You may not realize that your insurance policy does not cover you when you rent a car. As a result, it’s critical to double-check with your agent.