Primary Auto Insurance And Rental Cars: 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 may already have rental car insurance coverage through your personal auto insurance, a credit card used to book the rental, or another insurance policy.

Your personal car insurance policy might apply to car rentals, but you need to read the fine print. Generally, car insurance follows the car, not the driver. However, this doesn't apply when you're renting a car for personal use. If you have insurance on your car, it will typically extend to the rental.

If you don't have a personal auto policy, you will need to purchase liability coverage through the rental car company.

Liability insurance

When renting a car, it is important to understand the extent of your liability coverage. In most cases, your personal auto insurance policy will provide liability coverage for rental cars, but it is always a good idea to review your policy beforehand. If you don't have a personal auto policy, you will need to purchase liability coverage through the rental car company.

When renting a car, it is also worth considering other types of insurance, such as collision and comprehensive coverage, which protect against damage to the rental vehicle itself. Additionally, personal accident insurance and personal effects coverage can provide additional protection for injuries and the theft of personal items, respectively.

In summary, liability insurance is a vital component of renting a car, and it is important to ensure you have sufficient coverage to protect yourself financially in case of an accident.

Collision and comprehensive insurance

If you have collision and comprehensive insurance on your personal car insurance policy, it will likely cover a rental car in the event it is damaged in an accident—as long as you are renting in the same country or a country your insurer covers. However, it's important to know your insurance policy limits and deductibles, as these will apply to any covered claims associated with the rental car.

Before renting a car, it's important to speak with your insurance agent or company to find out exactly what your car insurance policy will cover. If your coverage isn't enough, you can inquire about what changes you can make to your policy to ensure you're covered.

If you don't have collision and comprehensive insurance, you can purchase a collision damage waiver (CDW) or loss damage waiver (LDW) from the rental car company. This isn't technically insurance coverage but a waiver stating that you won't be held responsible for collision damage to the vehicle. These waivers typically include a deductible.

Your credit card company might also offer rental car insurance if you use their card to rent the vehicle, but this varies from company to company and there are specific rules and restrictions to consider.

Personal injury protection (PIP) and medical payments (MedPay)

PIP is mandatory in several states, while MedPay is not. PIP provides $2,500 per person in coverage, unless it is rejected in writing. MedPay, on the other hand, provides a smaller amount of coverage, typically ranging from $5,000 to $10,000 per person.

Both PIP and MedPay can be beneficial if you are renting a car. They can provide financial protection in the event of an accident, covering medical expenses for you and your passengers. This can be especially important if you or your passengers do not have health insurance, or if your health insurance policy has a high deductible.

It is important to note that PIP and MedPay may not cover all medical expenses related to a car accident. For example, PIP does not compensate for pain and suffering. Additionally, MedPay may only cover expenses incurred within a year of the accident. Therefore, it is crucial to carefully review your policy to understand the specific coverages and limitations.

Credit card coverage

Most major credit card networks, including Visa, Mastercard, and American Express, offer some form of rental car coverage for cards on their networks. However, the coverage provided by your credit card company may vary depending on the specific card you have and the bank that issued it. To understand your coverage, you should consult the "guide to benefits" provided by your card issuer or call the phone number on the back of your card.

• Primary vs Secondary Coverage: Most credit cards offer secondary coverage, which means it kicks in after your personal auto insurance policy. In the case of an accident, you would first need to file a claim with your auto insurance company before submitting a claim through your credit card's insurance provider. Primary coverage, on the other hand, means you can submit an accident claim directly to your credit card company without going through your personal auto insurance first.
• Eligibility Requirements: To be eligible for credit card rental car coverage, you typically must pay for the full rental cost (plus fees) with that card and decline the rental company's Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). Additionally, the cardholder must be the primary renter, and other drivers should be listed on the rental contract.
• Coverage Limits: Credit card coverage usually has limits on the types of vehicles covered and the duration of coverage. For example, luxury cars and recreational vehicles are often excluded, and there may be a limit of up to two weeks (14 days) or a month (31 days) for coverage.
• Types of Coverage: Credit card coverage typically includes collision coverage for damage to the rental vehicle, theft coverage if the vehicle is stolen, towing charge coverage, and loss-of-use charge coverage if the rental company seeks compensation for lost rental revenue while the vehicle is being repaired. However, it usually does not include liability coverage, personal injury protection, or coverage for personal belongings stolen from the rental vehicle.
• International Rentals: Credit card coverage may vary for international rentals, with some countries being excluded from coverage. Additionally, if your personal auto policy doesn't cover you outside of your home country, your secondary credit card coverage may become primary coverage automatically.
• Claims Process: If you need to file a claim, contact your card issuer to understand the specific documents required. These may include a copy of the accident report, the rental agreement, a repair estimate, photographs, and a police report, if available.

Non-owner car insurance

• Borrowing cars often: If you frequently borrow a car and don't have your own policy, a non-owner insurance policy can provide liability coverage.
• Using a car-sharing service: A non-owner policy can give you additional liability coverage beyond what the car-sharing company provides.
• Renting cars often: If you rent a vehicle without an insurance policy, you are required to have liability coverage. A non-owner car insurance policy may be a more cost-effective option than purchasing liability coverage from the rental company each time. While it won't cover any physical damage to the rental car, you may be able to purchase a collision damage waiver from the rental company to add to your non-owner policy's liability coverage.
• Insufficient coverage from the car owner: If the car owner's insurance policy has low liability limits, a non-owner policy can provide additional protection in case of an accident.
• Denial of coverage under the owner's policy: In certain circumstances, you might be denied coverage under the owner's insurance policy. A non-owner policy can offer an alternative source of liability coverage in such cases.

Frequently asked questions