Renters And Auto Insurance: Do You Need Both?

Renters insurance is a type of insurance that covers your belongings if they are destroyed, damaged, lost, or stolen. It also provides liability coverage if a guest is injured in your home or if you accidentally damage your unit or the building. On the other hand, auto insurance is a type of insurance that covers your vehicle and provides liability coverage while driving. While renters insurance is not legally required, auto insurance is mandatory in most states. Bundling auto and renters insurance can often lead to discounted rates, but it is important to compare rates and coverage options from different providers to find the best option for your needs.

Renters insurance covers personal belongings in a vehicle

For example, if someone breaks into your car and steals your laptop, your renters insurance will cover the cost of replacing the laptop, but it will not cover any damage caused to the car during the break-in. Similarly, if your car is stolen with your laptop inside, you can make a claim through your car insurance to reimburse you for the value of the car, and then make a separate claim through your renters insurance to replace the laptop.

It's important to note that renters insurance has special limits, also known as category limits or maximum limits, which vary by policy. These limits apply to specific categories like electronics, jewelry, and property used for business purposes, and they restrict the amount of reimbursement you can receive for each category. Additionally, there is typically a coverage limit for personal property that is outside your rental unit, which is often lower than the regular personal property limit in the policy.

In summary, renters insurance can provide valuable protection for your personal belongings, even when they are in your vehicle. However, it's important to understand the limits and exclusions of your specific policy to ensure you have adequate coverage.

Renters insurance doesn't cover vehicle damage or theft

Renters insurance provides coverage for your personal property, personal liability, additional living expenses, and guest medical expenses. It typically covers fire, windstorms, lightning, explosions, theft, and vandalism. However, it's important to note that renters insurance doesn't cover vehicle damage or theft.

While renters insurance covers your personal belongings, including items inside your car, it doesn't extend to the vehicle itself. If your car is damaged or stolen, you will need separate insurance specific to your vehicle. This distinction is important to understand when considering the protection offered by renters insurance.

Renters insurance covers items stolen from your car but not the car itself or any of its parts. For instance, if your laptop is stolen from your car, renters insurance will cover the cost of replacing the laptop, but it won't cover the cost of repairing a broken window or any other damage to the car.

Similarly, if your car is vandalised, renters insurance won't cover the cost of repairing the vehicle. It will, however, cover any personal belongings that were damaged or stolen during the act of vandalism. It's important to distinguish between the coverage for personal belongings and the exclusion of vehicle damage or theft under renters insurance.

In summary, renters insurance provides valuable protection for your personal belongings, but it's important to understand that this doesn't extend to vehicle damage or theft. For comprehensive protection, it is advisable to have separate insurance specific to your vehicle, which covers incidents such as theft, vandalism, and damage to the car itself.

Auto insurance covers rental cars

In most cases, your auto insurance policy will cover rental cars, meaning you won't need to pay for duplicate coverage. However, it's important to review your personal auto coverage before renting a vehicle, as there may be situations where adding rental car insurance is beneficial.

Your personal auto insurance will typically cover rental cars with the same coverage limits and deductibles as your policy. For example, if you have comprehensive and collision coverage on your auto policy, you will likely be protected against physical damage to your rental car. Your liability coverage will also apply when driving a rental car.

However, it's important to note that your personal auto insurance may not cover rental cars for business use. Additionally, if you are renting a luxury vehicle, your insurer may not provide full coverage. In these cases, you may want to consider purchasing a loss damage waiver or collision damage waiver from the rental company, which will release you from responsibility for damage or theft of the rental car.

If you don't have a personal auto policy, you will need to purchase liability coverage through the rental car company. This is also an option if you want to avoid making a claim on your auto insurance policy, as doing so could result in a rate increase.

It's also worth considering rental car insurance if you're travelling internationally, as most US auto policies only provide coverage in the US and Canada.

Rental car insurance vs. rental car reimbursement

Rental car reimbursement insurance is an optional, additional feature you can add to your auto insurance policy to help pay for a rental car if your vehicle is damaged or stolen. It is different from rental car insurance, which is coverage that applies to a car you rent. Rental car reimbursement insurance is only about the cost of a rental vehicle.

Rental car reimbursement insurance typically covers a set amount per day for a set number of days. For example, a typical rental reimbursement policy might cover $30 to $40 per day for up to 30 days, or $25 per day up to a total of $800. The cost of adding rental reimbursement insurance to your policy generally ranges from $2 to $15 per month, depending on the policy, the size of the vehicle, and other factors.

Rental car reimbursement insurance is worth considering if you don't think you could afford one to two weeks of rental costs out of pocket on short notice. It can be especially helpful if you depend on your vehicle for work or for transporting your family. However, if you're already feeling strapped with your bills, including auto insurance, you may not want to add this additional coverage.

Rental car reimbursement insurance is also known as "loss of use" coverage or "transportation expense coverage" (in Virginia). It is widely available and offered by most major auto insurance companies, but it's often overlooked. You can add it to your policy at any time, not just at renewal.

Rental car reimbursement insurance is different from rental car insurance that you'd buy for a vacation or business trip. It's also different from the collision damage waiver (CDW) that rental car companies offer, which covers damage to the rental vehicle.

If your car is in the shop due to an accident that was another driver's fault, their liability insurance will typically cover the cost of a rental car for you. However, if fault is contested, you may need to pay for a rental car out of pocket and wait to be reimbursed later. In that case, having rental reimbursement insurance can be helpful, as it will cover the cost of a rental car while the issue of fault is being resolved.

Bundling auto and renters insurance

Bundling your auto and renters insurance is a great way to save money on one or both policies. It also makes policy management easier, as you only have to deal with one company. In most cases, you will have two separate policies with two different policy numbers, although some companies may assign the same number to both.

Renters insurance is not a legal requirement like auto insurance, but it is a good idea to have it. It covers your personal belongings from losses and provides liability coverage if you are found at fault for injuries or damage to guests' property. Basic renters insurance policies usually include personal property coverage, additional living expenses coverage, and liability coverage.

Auto insurance, on the other hand, is required by law in most states. It protects you from financial challenges in the event of an accident and helps ensure that costs for property damage and injury are covered. When bundling your auto and renters insurance, you can often get a discount on one or both policies. This is usually referred to as a multi-policy discount.

Some companies that allow you to bundle renters and auto insurance include GEICO, Allstate, Progressive, and State Farm. Keep in mind that not all carriers will offer a bundling discount, and it may not be worth it if the potential discount is outweighed by lower rates from another carrier.

Overall, bundling your auto and renters insurance can be a great way to save money and simplify your policy management. However, it is important to shop around and compare quotes to ensure you are getting the best deal.

Frequently asked questions