What to Know about Rental Car Insurance

By Susanne Wickham-Cook, Personal/Commercial Lines Agent

I get asked a lot if someone’s Rental Car Coverage on their insurance policy will extend to a car that they are renting for a trip. If you have Rental Car Coverage on your automobile policy and your vehicle is in an accident that you are deemed liable for, the insurance company would allow you to rent a vehicle under the limits of that policy for a car to use while your vehicle is being repaired.

If you need a rental car on a vacation or to take a trip, you might be wondering if your policy covers it. The simple answer is that your policy will not pay for the rental car, but your limits of liability for your state should extend to the rental car. You should always check with your insurance agent before renting a car to make sure your policy will provide adequate coverage for your rental.

Typically your Collision coverage would extend to a rental car, but keep in mind that if you have an accident in that vehicle, the claim is going to be filed under your personal auto policy and it could cause your rates to go up. Sometimes, there are limitations on what kinds of vehicles you can rent under your personal auto coverage. Again, it’s always best to check with your agent before you book your rental car.

You can also check in with your credit card company to see if your card benefits include Rental Car Coverage. The important thing to remember here is that you must use that particular card to book and pay for your rental.

If your auto policy or credit card doesn’t cover your rental, you will have the option to buy insurance through the rental car company. When you rent a car through the rental car agency and purchase their insurance, it is only going to give you the minimum liability limits for the state that you live in. If you want additional coverage, you will incur additional cost. One advantage of buying insurance from the rental car company is that if there is a claim made, it won’t impact your personal auto insurance rates.

You could also look into what’s called a Loss Damage Waiver (LDW). This will cover the vehicle if you’re involved in an accident that’s deemed to be your fault. It will also cover any scratches, dings, or dents that might happen to the vehicle while it’s in your possession. It also covers towing and the administration fees associated with it and the loss of use of that vehicle for the rental car agency while that vehicles is being repaired.

Another type of coverage that you might be offered by the rental car company is Personal Effects Coverage. This coverage would reimburse you if you have personal property inside the rental car that is stolen or gets damaged in the event of an accident.

The bottom line is that most personal auto coverage will be just fine as far as covering you when you rent a car. However, there are exceptions, so it’s always best to get in touch with your agent in advance of renting to explore your options.

If you have further questions about auto and rental car coverage – or anything else insurance-related – please feel free to reach out. We’d love to help.