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When renting a car, do you need rental car insurance? Ask a car rental company and they will tell you you can. But ask an insurance professional and the answer will be downgraded to “maybe”.
In general, personal car insurance covers rental cars with the same coverage limits. However, check with your insurance agent to check if you have a rental.
“It’s important to understand that not all personal car insurance policies cover you when you rent a car,” said Jonathan Weinberg, co-founder of the car rental website AutoSlash. “Many do, but it is important that you check your rental coverage with your insurance agent or freight forwarder beforehand.”
When you rent a car, you take responsibility for an expensive vehicle. For example, a Ford Fusion, one of the big cars in the Enterprise fleet, brings you back $ 23,170. The GMC Yukon in Hertz’s fleet costs $ 50,600.
Car rental companies have fleet insurance for their vehicles, but it does not cover the cars and trucks when they are rented. And when you rent a car, you sign a form in which you take responsibility for the vehicle. That means, whatever happens is up to you – or your insurance company.
If you’re uninsured and have the entire car, a rental company will hand you a bill for $ 23,170 for the merger. Or $ 50,600 for the Yukon.
What does car insurance cover?
There are three main types of insurance that can cover rentals from your personal auto insurance:
1. Liability Insurance
Motor vehicle liability insurance pays for repairs when you damage someone else’s car or property. It pays off for others too if you cause injury in an accident.
Collision insurance pays for repairs to your rental car if it is damaged. This type of coverage pays off even if you are responsible for the accident. It also has a deductible, which is the amount that is deducted from a payment for insurance claims.
This type of coverage pays off to repair your rental car if it has been damaged by fire, vandalism, flood or natural disaster. It also includes vehicle theft. The deductible from your comprehensive cover applies.
But is it enough?
“It depends,” says Zhaneta Gechev, former manager of a major auto insurance company and founder of One Stop Life Insurance, an insurance company. “Most companies – and everyone has to confirm this with their representative – will extend coverage to any vehicle that you rent for personal use. In other words, the coverage for your auto insurance is for a rental car. However, there are a few things to consider. “
Pay attention to the exclusions
Truck, van, and luxury car rentals may not be included in your personal car insurance. And if you rent for more than a month, your car insurance may no longer apply.
Auto insurance does not cover downtime charges
If you damage a rental car and it is in the repair facility, your car rental company may charge a daily downtime fee.
“The problem that can arise is that personal auto insurance policies do not cover the loss of income that a rental company may charge you while the car is being repaired,” said Jeff Zander, CEO of Zander Insurance, an insurance agency. “If a repair costs $ 10,000 but takes 18 days, they can try to bill you for the income they lost in those 18 days and the insurance companies won’t reimburse those costs.”
Auto insurance is unlikely to work outside of the US
Your auto policy coverage for a rental car outside the country is unlikely to work.
“Rental coverage generally only applies if you’re renting in the US,” says AutoSlash’s Weinberg. Note that in some countries such as Ireland and Jamaica it is necessary to take out rental car insurance. In this case, the insurance costs should be included in the price of your rental vehicle. Auto Europe publishes a full list of country-specific insurance requirements.
Consequences of a Claim
When filing an insurance claim from your own policy, experts warn of several other problems. You must pay the deductible when making a collision or a full insurance claim. After that, there is a possibility that your car insurance rates will increase. For this reason, many travelers prefer to rely on their credit card coverage to file a claim. Therefore, the claim will not remain in your insurance records.
Another way to keep your insurance records clean is to buy the landlord’s comprehensive insurance (CDW).
Purchase of insurance from the rental agency
Even if you think you have insurance, you may still want to get car rental insurance through your travel insurance company or directly through the rental company, experts advise.
“The reality is that the majority of vehicle owners have little idea what exclusions their auto insurance contracts contain,” says Prosper Shaked, a Miami-based trial attorney. You may not be aware that your policy excludes coverage when you rent a vehicle. This is why it is important to check with your agent.
On the other hand, consumers often complain about the cost of car rental insurance. This is a separate topic, but it is certainly worth considering. Car rental companies train their frontline agents to sell insurance, which is highly profitable for the rental company but can easily double the cost of your rental. You are also aware of the widespread confusion about what auto insurance covers – and what it doesn’t. For them, it’s the perfect fit to sell optional car rental insurance.
Regardless of what you choose, think about car rental insurance before you travel so that you don’t get ripped off at the rental car counter.
If you don’t, you could end up paying for expensive optional rental car insurance – and potentially buying coverage you already have.