Alyssa Lane
If you're renting a car, you may be wondering if your auto insurance policy will cover it. The answer is: it depends. In most cases, your auto insurance policy will provide equivalent coverage for a rental car as long as you're using it for personal purposes. However, there may be situations where adding rental car insurance is beneficial. For example, if you have high deductibles on your auto policy or want to avoid claims on your auto policy. It's important to review your personal auto coverages to determine if adding rental car insurance is worthwhile.
| Characteristics | Values |
|---|---|
| What is rental reimbursement auto insurance? | Helps pay for a rental car if your car is damaged or destroyed due to a problem covered by your policy, like a crash, flood or fire. |
| When is it needed? | When your car is being repaired for an accident insurance claim. |
| What does it cover? | Transportation costs, such as a rental car or public transportation fees. |
| How much does it cost? | It costs about $4 per month to add rental car reimbursement coverage to your car insurance policy. |
| What are the limitations? | Rental reimbursement coverage generally only pays for a rental car or other transportation costs when your car is being repaired after an accident or incident that your insurance covers. |
| What are the alternatives? | Rental car insurance, which is obtained through an add-on to a travel insurance policy. |
What You'll Learn
Rental reimbursement coverage
The cost of rental reimbursement coverage varies depending on factors such as the desired level of coverage, the size of the vehicle, and the insurance company. It generally costs between $2 and $15 per month to add this coverage to your policy, with an entire year's worth of coverage costing about the same as renting a car for a day.
When choosing rental reimbursement coverage, consider factors such as the daily and total claim limits offered by the insurer, as well as whether the coverage includes transportation expenses beyond just rental cars, such as ridesharing services or public transportation. Additionally, keep in mind that you typically need to have comprehensive and collision coverage on your policy to be eligible for rental reimbursement coverage.
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Rental car insurance
However, if you don't have comprehensive or collision coverage, or you're renting a luxury vehicle that your insurer won't cover, you may want to consider purchasing rental car insurance. Additionally, if you have high deductibles on your auto policy, rental car insurance may be worth it as it often carries no or low deductibles.
There are four main types of rental car insurance:
- Liability coverage: Pays for damage you do to others' vehicles or property.
- Loss damage waiver (LDW) or collision damage waiver (CDW): Waives your responsibility for damage to the rental car or theft of the car.
- Personal accident insurance: Covers medical costs for you and your passengers if you're involved in an accident.
- Personal effects coverage: Pays for your belongings if they're stolen from the rental car, up to a set dollar amount.
Before purchasing rental car insurance, review your personal auto insurance policy to see if you already have sufficient coverage for rental cars. If not, consider the cost of rental car insurance and whether it aligns with your budget and needs.
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Rental car reimbursement
Rental reimbursement coverage typically has daily and per-claim limits, and it's important to check for specific coverage information as these limits vary by insurer. For example, your insurer may reimburse you for up to $30 per day and up to $900 per accident. This amount is usually enough to cover the cost of renting an economy car, but if you require a specialty or luxury vehicle, you may need to pay more for a comparable car.
In most cases, rental reimbursement coverage doesn't have a deductible, but you will have a deductible on your collision and comprehensive coverage to get your car fixed. It's also worth noting that rental reimbursement coverage won't cover the cost of a rental car if your vehicle is undergoing routine maintenance or if you're on vacation.
The cost of adding rental reimbursement coverage to your policy depends on the insurer, but it generally falls between $2 and $15 per month. This is a relatively low cost compared to out-of-pocket car rental costs, which average more than $130 per day.
When deciding whether to add rental reimbursement coverage to your policy, consider whether you could afford one to two weeks of rental costs out of pocket on short notice. If you depend on your vehicle for work or family commitments, this coverage can provide peace of mind and ensure you have reliable transportation, even when your car is in the shop.
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Collision damage waiver
A Collision Damage Waiver (CDW) is an optional extra offered by car rental agencies to cover damage to a rented car. This waiver is sometimes called a Loss Damage Waiver (LDW) or Physical Damage Waiver. The cost of a CDW depends on factors such as the rental car type and location, and it typically costs around $30 per day.
A CDW is worth considering if you don't have your own car insurance, a credit card with rental car coverage, or a third-party rental car insurance policy. It can also be a good option if you simply want to avoid any extra charges due to vehicle damage, or the hassle of identifying coverage gaps in your existing insurance.
If you decline a CDW, the rental car company can charge you for repairs, as well as loss of use, towing, diminished value, and administrative fees. While your own insurance or credit card coverage may pay for some of these costs, the expenses can vary and you may have to rely on the rental company's cooperation.
It's important to note that a CDW doesn't cover damage to other cars, bodily injury to others or yourself, or theft or damage to your personal items in the vehicle. Additionally, depending on the rental location, a CDW may not cover interior damage, lost or damaged keys, or damage to the windshield, tires, and mirrors.
Some credit card companies offer coverage for rental cars as a benefit when you use their card to pay for the rental. However, this coverage may have limitations, such as only being valid in the United States or having secondary insurance that only pays for the amount not covered by your auto insurance.
Standalone rental car insurance policies are also available, but they may have exclusions and limitations on the types of vehicles and locations covered. Travel insurance with rental car coverage is another option that can provide perks like a collision damage waiver and coverage for trip interruptions and baggage loss.
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Personal accident insurance
Accidents can happen anytime, anywhere, and they can be costly. Personal accident insurance is a type of supplemental health insurance that provides financial protection in the event of an accident. It covers a wide range of accidents, including those that occur during work, at home, or while participating in sports or recreational activities. It is important to note that benefits may vary depending on the insurance company and the specific plan.
The cost of personal accident insurance is generally low, especially when compared to the potential long-term savings. It can be purchased as an individual or family plan, providing comprehensive protection for you and your loved ones. In the event of an accident resulting in death or permanent disability, compensation is paid based on a percentage limit.
When considering personal accident insurance, it is important to review the limitations and exclusions of the policy carefully. While it provides valuable coverage for accidents, it does not typically cover illnesses or chronic medical conditions. However, other types of supplemental insurance, such as critical illness insurance and cancer insurance, can help fill these gaps.
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Frequently asked questions
It generally costs between $2 and $15 a month to add rental reimbursement to your auto policy, but final costs are determined by an individual policy, the size of the vehicle and more. This is relatively inexpensive compared with out-of-pocket car rental costs, which average more than $130 per day.
Coverage for rental reimbursement typically lasts a month. When working with your insurance company to pick your coverage and add reimbursement to your policy, estimate how long you'd need reimbursement covered to figure out how much coverage you need. The average time it takes a car to be repaired after an accident is one to two weeks, so that may be sufficient coverage.
You have the right to choose any rental car service, whether it's an affiliate of your insurer or an independent rental agency. If you choose an affiliate partner through your insurer, the rental car company can directly bill the insurer. If you arrange your replacement independently, make sure the rental car company is aware of the situation.
