Rent-A-Car Coverage: Understanding Your Ca Auto Insurance Policy

If you're renting a car in California, it's important to understand the insurance requirements and what your auto insurance policy covers. In California, rental car companies are not required to provide liability protection as part of their standard rental agreement, so it's crucial to review your own auto insurance policy before renting a vehicle. Your personal auto insurance policy may cover rental cars, but it's important to know the limitations and deductibles. Comprehensive and collision coverage on your auto policy typically extends to rental cars, providing protection against physical damage. However, it's important to note that rental cars for business use may not be covered under your personal policy. Additionally, your policy may only apply within the US and Canada, excluding rentals in other countries. Understanding your coverage limits and any potential out-of-pocket expenses, such as deductibles and loss of use fees, is essential before making a decision.

Liability insurance

However, if you are renting a car, it is important to check with your insurance provider to see if your policy covers rental cars. If you don't have auto insurance, you will need to purchase liability coverage through the rental company.

If you are travelling overseas, your personal auto insurance policy may not provide coverage. In this case, you will need to purchase liability insurance from a rental company or a third-party insurer.

It is also worth noting that liability insurance does not cover your own injuries or damage to your rental car. To cover these, you would need additional insurance such as personal injury protection or medical payments coverage.

Collision and comprehensive insurance

If you have a personal auto insurance policy that includes collision and comprehensive coverage, it will typically extend to rental cars as well. This means that if you damage a rental car in an accident, your insurance will cover the repairs or replacement of the vehicle, minus your deductible. However, it's important to note that your personal auto insurance only covers rental cars for personal use, such as driving while on vacation, and not for business use. Additionally, there may be gaps in coverage between your personal auto insurance and the rental car, such as the rental company's "loss of use" fee, which is the charge for lost income while the rental car is being repaired.

Before renting a car, it's important to review your personal auto insurance policy and understand its limitations. If you don't have collision or comprehensive coverage, or if you have high deductibles, you may want to consider purchasing additional rental car insurance from the rental company or adding a loss/collision damage waiver. This can provide extra protection and help you avoid potential rate increases on your personal auto policy in the event of a claim.

Personal injury protection (PIP) and Medical Payments (MedPay)

Personal Injury Protection (PIP)

PIP is obligatory in 12 no-fault states and is more comprehensive than MedPay. It covers medical expenses, lost wages, and other costs related to an auto accident, such as childcare and household expenses. PIP also covers funeral expenses and survivors' loss. The coverage limits vary between states, but companies must provide a minimum of $2,500 per person, unless it is rejected in writing. PIP does not compensate for pain and suffering.

Medical Payments (MedPay)

MedPay is an optional supplement to car insurance policies and is typically cheaper than PIP, with a payout limit ranging from $5,000 to $10,000. MedPay covers 'reasonable and necessary' medical expenses for the insured person and their passengers after a car accident, regardless of who caused the accident. It can function as primary medical insurance or as a supplement to existing health insurance coverage. MedPay does not cover lost wages or pay for essential services if the injured person is unemployed.

PIP vs MedPay

While both cover medical expenses following an accident, PIP provides more comprehensive coverage. MedPay is an optional add-on to car insurance policies, whereas PIP is obligatory in most no-fault states. MedPay is typically cheaper than PIP, but PIP costs can vary widely by state.

Credit card coverage

Primary coverage means that your credit card company will pay out a claim first, and you won't need to involve your car insurance company or pay a deductible.

Secondary coverage means that your credit card will only pay the amount that is not covered by your car insurance policy. However, your credit card company may reimburse you for your deductible and other fees, such as towing charges and loss of use. Secondary coverage is the more common type offered by credit cards.

Before renting a car, it's important to understand the specific coverage offered by your credit card, as well as any exclusions or limitations. Contact your credit card company or refer to your card's guide to benefits to get this information.

Non-owner car insurance

In California, the average cost of non-owner car insurance is $41 per month, slightly lower than the national average of $43. The cheapest providers in the state include Progressive, Farmers, and Kemper. Progressive offers the lowest rates for drivers with clean records, while Farmers provides the most affordable policies for those with violations on their records.

Frequently asked questions