Does Auto Insurance Cover Rental Cars?

There are a number of things to consider when planning a trip. One important aspect that is commonly overlooked: rental car insurance. Rental companies like to offer additional insurance, but do you really need it? For many people, their personal auto insurance covers a rental as long as it’s not a business trip. Although, paying for coverage with the rental company is one way of avoiding an existing high insurance deductible.

Rental Auto Insurance

Before even packing for your trip, find out what your personal insurance covers and what it doesn’t. If you are adequately covered, you may be able to decline the coverage offered by the rental company. Most rental companies usually have a predictable selection of coverage to offer.

Liability Coverage

This is a fundamental component in most car insurance policies. It covers the damage done to other vehicles you’re legally obligated to cover. You should check with your provider, but most likely you will have adequate coverage from your personal insurance policy.

Comprehensive Collision Coverage

This pays for the damages from accidents are out of your control, like fire, hail, and falling tree limbs. This is optional for car insurance companies, so make sure you have it before you turn down coverage from the rental company. If you have any damages to your rental vehicle, you will have to pay a deductible.

Personal Accident Insurance

This will cover your medical bills in case of injury resulting from a car accident. There’s no deductible for this, and it is optional, but it covers you or passengers if injured in an accident. Your existing auto insurance policy may already include Personal Injury Protection, which is often required in some states. The personal accident insurance from rental car companies essentially covers the same and should only be considered if you don’t have health insurance.

Collision Damage Waiver

While this is not an insurance product, it transfers financial responsibility to the rental company for the time the car cannot be used because it needs to be repaired. This will not cover you while speeding or driving on unpaved roads. You should consider this if you don’t have comprehensive and collision coverage with an existing policy or if you want to avoid a high deductible.

Personal Effects Coverage

Typically, homeowners, renters, or condo insurance covers your personal items, even if they are stolen from the rental car. If you don’t have any of these policies, you might want to include this with your rental car. A deductible applies here as well.

Some drivers choose auto insurance coverage with the rental company if they have a high deductible and they don’t have to use their own insurance, they need more coverage than their policy offers and they want to increase their coverage temporarily. To learn more about what auto insurance coverage you may need, contact Absolute Choice Insurance.


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