Car Rental Insurance: Am I Covered?

Should I purchase car rental insurance? This is one of the most common question everyone asks, and nobody seems to definately know. Do I need to buy the insurance, or does my insurance company cover me?

If you have liability insurance, you are covered, but only for liability. Liability insurance basically covers the driver and not the car. If you have liability insurance, (which is required by law) then you are covered in whatever car you drive, as long as it is a rare occurance, and not part of a routine. A rental car is no different, your insurance company will cover any damages you cause to anyone else (property and injur), up to your limit.

However, your other coverage options will probably not transfer (collision, comprehensive) so any damage to the you cause to the rental car is your responsibility. Even if you have collision and comprhensive insurance in your policy, these coverages are specific to the car, so they will not transfer to your rental car, and it will not be covered.

Most rental companies offer collision coverage on vehicles at a small per day price ($10-$15), the benefit to this is that any claims made will not affect your own insurance premiums.

Insurance companies may also offer a special endorsement policy that provides coverage for non-owned cars. But under this plan, if you cause damage to your rental vehicle it will cause your regular car insurance premium to increase. Be sure to check with your company to see if you are covered on rental cars.

Also some credit cards offer rental insruance if you use their card to pay for the rental. Check with your credit card company to see if this applies. they usually have strict guidelines, such as use must rent from certain rental companies.

In my opinion, having your rental car covered is a must, whether it is from your own policy, car rental insurance, or your credit card company, as you don’t want to be on the hook to repair a car that isn’t even yours! Before you buy it, make sure you check with your insurance, and credit card companies to see if you already covered and don’t need to fork over the extra cash.

Lending or Borrowing a car? Many of the rules for car rentals apply when you lend your car. See all the information here. 

Author: Erik Gray