A common question often asked is if your rental car is covered under your auto insurance policy. You start thinking about it the moment you walk into a rental car office, before you even have the keys in your hand, you know the following question is coming from the rental car company, “Would you like to purchase rental car insurance?” You know the question, but do you know the answer?
If you have car insurance, your policy may provide coverage for your rental car. The extent of coverage you have for a rental car depends on your policy’s terms and conditions, reason for renting a car, and the rental car company’s contract. There are a few key items to look into before you can correctly answer the tricky rental car question.
What does my car insurance policy cover?
Look over your auto policy and ask your insurance agent about coverage your policy may provide for your particular rental car situation. The coverages, limits, and deductibles on your policy may extend to the rental car. If you do not have an auto policy, ask your agent about purchasing a non-owned policy for your rental car.
What are the reasons I am renting the car?
Here are some common reasons for renting a car and general coverage guidelines that apply:
- For business. Your personal auto policy may provide coverage while renting a vehicle for business purposes, but your employer’s insurance should apply first. Ask your employer about insurance coverage the business provides when renting a car for business use.
- While on vacation or temporarily. Your auto policy’s coverages, limits, and deductibles probably extend to a rental car, but often for a limited number of days and only while traveling within the country.
- When your vehicle is in the shop. If your vehicle has to be repaired or replaced because it was in an accident, your auto policy (or the at-fault party’s car insurance) may pay the cost to rent a vehicle. The same coverages, limits, and deductibles on your policy will likely extend to your rental car.
What does the rental car contract say?
Review the contract ahead of time and ask the rental car company about which fees you would be responsible for if the rental car was stolen or in an accident. Look for gaps between coverage you already have and additional costs you could incur.
Rental car companies typically offer the following coverage options:
- Loss Damage Waiver (or Collision Damage Waiver)
Transfers financial responsibility from you to the car rental company if the car is damaged, stolen, or unable to be rented out to others. If your car insurance policy has Comprehensive (Other Than Collision) and Collision coverages, you may not need to purchase this waiver. However, this waiver could provide additional protection to cover your Comprehensive or Collision deductible, fees for the loss in value of the rental car, and for the time the car is not able to be rented out. Not to mention, if you have an Acuity auto policy, the Acuity Auto Enhancement automatically covers loss in value and loss of rent when car is being repaired, but most insurance companies do not cover these exposures. Please consult with your agent to learn more.
- Liability Coverage
Pays for injuries to others (Bodily Injury Liability) or damage to others’ property (Property Damage Liability) caused by an accident in which you are at fault. If your auto policy’s Liability coverage extends to your rental car with limits that you are comfortable with, you should not need to purchase this additional coverage.
- Personal Accident Coverage
Provides medical expense and death benefits, resulting from an accident with the rental car, to the driver and passengers. If your auto policy extends Medical Payments or Personal Injury Protection coverage to your rental car, this would be duplicate coverage.
- Personal Effects Coverage
Covers any personal items stolen out of the rental vehicle. Your auto policy may not provide coverage for personal items, but your renters or homeowners policy might, subject to any deductible.
In addition to your insurance policies, you may have rental car coverage from other sources. If you plan to charge the car rental on your credit card, contact your credit card company ahead of time to see if they offer rental car coverage, what that coverage entails, and at what additional cost.
Before you rent a car, talk with your insurance agent. An Acuity independent agent can help take the confusion out of the rental car insurance question. Don’t forget to bring proof of your insurance with you at the time of rental. Safe travels!