Auto Insurance And Rentals: What's The Coverage?

If you're renting a car, it's important to understand your insurance options before you get to the rental counter. You might already have rental car insurance coverage through your personal auto insurance, a credit card used to book the rental, or other insurance policies.

Your personal car insurance generally covers rental cars with the same coverage limits and deductibles as your policy. However, your personal car insurance only extends coverage to rental cars for personal use, such as driving a rental car while on vacation. It won't cover business use, such as driving a rental car to meet a client for work purposes.

Additionally, there may be some gaps in coverage between your personal car insurance and your rental car. For example, your personal car insurance typically won't cover the rental company's loss of use fee, which is the charge for lost income while the rental car is being repaired.

If you don't have coverage through your personal car insurance, credit card, or other forms of insurance, or if you have gaps in coverage, you may want to consider purchasing rental car insurance to ensure you're adequately protected.

Liability insurance

If you have a personal auto insurance policy, it will likely cover rental cars with the same coverage limits and deductibles. However, it's important to note that personal auto insurance usually only applies to rental cars used for personal purposes and may not cover business use.

If you don't have a personal auto insurance policy, you will need to purchase liability coverage through the rental car company. This is known as supplemental liability protection (SLP) and covers property damage and bodily injuries you accidentally cause to others. The policy limits will depend on the company, with some companies providing up to $1 million in liability coverage.

In addition to liability insurance, there are other types of coverage to consider when renting a car, such as collision and comprehensive insurance, personal injury protection, and personal accident insurance. These coverages can help protect you financially in the event of an accident or damage to the rental car.

Collision/loss damage waiver

The cost of a CDW is generally about $30 per day, although the price can vary depending on the rental company, location, vehicle type, and other factors. CDWs are particularly useful if you don't have your own car insurance, or if your insurance policy doesn't cover rental cars. If you do have car insurance, check whether it covers rental cars, as often it will, and whether it includes loss of use, towing, and administrative fees.

If you don't have car insurance, a CDW could save you from having to pay a high deductible on a personal car insurance policy. It is also a good option if you don't want to risk your insurance rates rising in the event of an accident with a rental car.

When deciding whether to purchase a CDW, it is important to consider your coverage needs and risk tolerance. If you are renting a car in a different country, it is worth noting that your personal car insurance is unlikely to cover you, and some credit cards also exclude certain countries from their coverage.

Some rental companies offer a second tier of coverage, called "super CDW" or "zero-deductible coverage", which reduces the deductible to zero or near zero. This option provides greater peace of mind but is more expensive.

Before purchasing a CDW, it is recommended to review your auto insurance policy and contact your insurance provider to understand what coverage, if any, extends to rental cars.

Personal effects coverage

It is important to note that personal effects coverage does not include all items. Exclusions may vary depending on the insurer, but some common items not covered include medical supplies, high-end electronics, and equipment attached to the rental vehicle, such as stereo equipment or built-in GPS systems.

When considering personal effects coverage, it is essential to review the specific details of the policy to understand what is covered and what is not. Additionally, some rental car companies may offer personal accident insurance and personal effects coverage (PAI-PEC) together, providing additional benefits in the event of an accident.

Personal accident coverage

Personal accident insurance is designed to protect you and your passengers from financial hardship in the event of an accident while driving a rental car. It covers medical expenses, hospital stays, and death benefits, providing peace of mind during your rental period.

The cost of personal accident coverage varies depending on the rental car company and your specific needs. For example, Avis offers personal accident insurance for as low as $7 per day. It is important to note that personal accident coverage may already be included in your health, life, or car insurance policies, so it is essential to review your existing policies before purchasing additional coverage.

When renting a car, it is crucial to understand the different insurance options available and assess your coverage needs. While personal accident coverage is not mandatory, it can provide valuable protection in the event of an accident. By reviewing your existing policies and the rental company's offerings, you can make an informed decision about whether to opt for this additional coverage.

Personal accident insurance ensures that you and your passengers are financially protected in the event of an accident while using a rental car. It provides peace of mind and can help cover medical and hospital expenses, as well as accidental death and dismemberment.

Credit card coverage

Types of Coverage

The two main types of credit card coverage are primary and secondary coverage. Primary coverage handles damages to the rental car regardless of other insurance policies, while secondary coverage only kicks in after your other policies, such as your personal auto policy. Both types of credit card coverage usually cover rental vehicle damage but not liability. Therefore, it's important to have proper liability protection elsewhere.

Eligibility

To be eligible for credit card coverage, you typically must pay for the entire rental with your credit card and decline additional coverage from the rental company. Additionally, the driver at the time of any incident must be listed on the rental agreement.

Coverage Limits

However, credit card coverage typically does not include liability concerns, such as damage to property or injuries to others. It also generally excludes personal belongings inside the rental car, but these may be covered by homeowners or renters insurance. Ambulance or medical bills following a crash are also usually not covered by credit card policies but may be covered by your personal health or auto insurance.

Vehicle Exclusions

Coverage Period

The credit card coverage period is usually limited. For example, coverage may be provided for a maximum of 15 consecutive days in your country of residence or 31 days outside of it. If you're renting a car for an extended period, you may need to purchase separate insurance.

Claims Process

The claims process for credit card rental car coverage can be cumbersome and may require various documents, such as accident reports, rental agreements, repair estimates, photographs, and police reports. Contact your credit card company to understand their specific requirements and procedure for filing a claim.

Frequently asked questions