Renting a car is essential for vacations, business travel, or even if your own vehicle is in the shop for repairs. Most rental car companies try to get you on the road as quickly as possible, which is great if you're in a hurry. However, this means you may not have time to ask questions about car insurance coverage while at the counter.
Before you hit the road in a rental car, you should know what your own personal car policy covers and all other options available to you. And are those coverages the rental car company offers really necessary? Here's what you need to know about rental car insurance.
Do I Need Rental Car Insurance?
One of the first questions most people ask when securing a rental car is if they even need rental car insurance at all. The answer to this depends on how your personal auto policy is written, if you have one.
If you have personal auto insurance, your liability, collision, and comprehensive coverage usually extends to a rental car when you rent within the United States. Your coverage could also be different if you are renting for business use versus your own personal use.
The best practice is to contact your insurance provider prior to renting a vehicle to find out exactly what is covered. This way, you'll know upfront without all the confusing insurance jargon you see when you're reading your policy yourself. If you're renting a vehicle for business, then check with your employer about coverage.
Keep in mind, you do not need to have your own personal auto insurance policy to rent a car. Basic car coverage is included with rentals. However, the coverage limits are low. This means you could still be on the hook for several thousands worth of damages if you're involved in an accident.
Other Rental Car Insurance Options
There are other options for rental car insurance which you may want to know about before you sign any contract at the counter.
Rental Car Insurance Through a Credit Card
Many renters may not realize they have benefits through their credit card company when they book a rental with their card. Typically, a credit card company offers secondary coverage. This means if you do have a personal auto policy in place, then the credit card company will provide benefits after you exceed the limits on that policy. Credit card coverage is helpful for filling in the gaps with your own policy. Keep in mind, you must use the credit card when securing the rental to receive any of the insurance benefits.
Usually, credit card coverage includes collision damage waiver or loss damage waiver coverage. The car insurance through the credit card may also cover you when you're traveling outside the United States.
Third-party Coverage
Another option is to buy a rental car insurance policy from a third party. There are several options available online that charge a flat, per-day rate for a standard rental car insurance policy. Sites such as Allianz Global Assistance, Bonzah, and Insure My Rental Car are a few examples of third-party services.
These standalone plans are generally less expensive than the options from the rental car company. Even better, some plans will also cover you when traveling overseas.
Do I Need the Rental Car Insurance Options from the Rental Car Company?
When you have your own policy, credit card, or third-party plan, you may still feel confused when you're renting a car. Does it make sense to buy this extra rental car insurance?
Generally, it's only a good idea for people without insurance. If that's you, a rental car company could offer you the following:
Loss-Damage Waiver
Also referred to as an LDW or Collision Damage Waiver, this is a waiver so you are not responsible for any damages or theft to the rental vehicle. If you do not have your own policy, credit card coverage, or a standalone policy, you would be responsible for damages if you do not purchase the LDW.
Supplemental Liability Insurance
Liability insurance pays for expenses when another driver is hurt or there is damage to another vehicle. If you do not have your own policy or credit card coverage, then consider purchasing this from the rental car company.
The range of supplemental insurance may be up to $1,000,000. Since these types of expenses can get quite high, it's a good idea to have adequate liability coverage so you're not stuck with enormous bills.
Personal Effects
This coverage is offered to pay for any items that may be stolen out of the rental car. Your homeowners or renters insurance policy would likely cover this as well, even if you are renting a car outside the United States.
Personal Accident Insurance
This coverage is offered at the counter to pay for your own injuries (or the passengers riding with you). This covers expenses for the ambulance ride, medical treatment, and death benefits.
Again, your own auto policy likely includes these above coverages. Your health insurance would also pay towards some of these costs, even if you are traveling overseas. If you are traveling overseas, your travel insurance will have coverage limits, too. In summation, consider purchasing the coverage through the rental car company if you don't have any other options as listed.
Stay Safe in Your Rental Car With Defensive Driving
Whether you're driving a rental car for business or pleasure, Aceable can get you road-ready. Check out our extensive list of defensive driving class options. Not only do these classes help you become a better driver, but they could also help you earn additional discounts on your personal auto policy.