Rental cars have become a staple of business trips and the great American vacation. But rental cars come with the question, “Do I purchase the extra insurance coverage or take my chances?”
In general, your individual auto policy will cover you when you drive a rental car, so you won’t need to buy rental insurance. But always check with your insurance company before you pick up your rental car to be sure.
First, Does Your Car Insurance Cover Rental Cars?
It’s a good idea to understand your personal car insurance policy before paying for your rental car. A lot of policies extend coverage to rental cars, so depending on what your car insurance policy says, your rental may already be covered.
But don’t assume. Check your coverage policy before you rent your car to be sure. If your policy doesn’t extend collision or comprehensive coverage to your rental, you may have to pay out of pocket if you get into an accident. And no one wants that.
If you’re on business, check if your company has insurance that covers rentals. If so, it’s not necessary for you to buy rental insurance because you’re already covered.
Types of Rental Car Insurance Coverage
It’s a good idea to understand rental car insurance products before you pick up your car. Most companies offer these coverage options:
- Collision/Loss Damage Waiver – Costing as much as $20 a day, this covers theft or damage to the rental vehicle in a collision. If you don’t have comprehensive or collision coverage on your personal auto policy, you’ll need this waiver.
- Liability Insurance – This supplemental liability coverage will cost about $15 a day for $1 million in coverage, but it isn’t necessary if your personal auto insurance policy provides adequate liability coverage.
- Personal Accident Insurance – For about $5 a day, this covers medical bills for you and your passengers if you’re injured while driving your rental. Still, your personal health insurance or personal injury protection on your auto policy probably provides adequate coverage, so you probably won’t need personal accident insurance.
- Personal Effects Coverage – This will cover any personal property that is stolen from the vehicle. However, your renters or homeowner’s coverage may also provide the same protection.
If you decide not to purchase the extra coverage from the rental company, there are a few things you should be aware of:
- If the rental car is damaged or stolen and you have to file a claim, it will affect your premium the same as if the incident involved your own car.
- The rental company may charge a deposit on your debit card and then refund the money when you return the car in good condition.
- Your personal auto coverage does not cover vehicles like moving trucks. In that case, you will need to purchase insurance from the truck company.
What Does Rental Car Insurance Cost?
The cost of rental insurance can vary depending on your state, who you buy it from and how much coverage you want.
Do you have the right auto insurance coverage? You could be saving hundreds!
Typically, full coverage insurance costs $30 to $60 per day. If you choose to shop a la carte, here’s about how much each will cost:
- Collision/Loss Damage Waiver - $20 per day
- Liability Insurance - $15 per day
- Personal Accident Insurance - $5 per day
- Personal Effects Coverage - $2 per day
When Should I Get Rental Car Insurance?
You should get rental car insurance when your personal insurance policy doesn’t cover rentals, you don’t own a car but rent from time to time, or if you rent cars more than the average person.
If you rent often but don’t carry your own policy, you might want to get nonowner car insurance. Nonowner car insurance covers bodily injury and property damage in the event of an accident when you’re driving a car you don’t personally own. It also tends to be less expensive than standard insurance, which is good for your budget.
If you’re looking for car insurance, check out one of our trusted professionals. They’re always looking to help people like you get the best coverage and the best deals. Find an insurance broker near you.
Renting a car outside the U.S. brings its own challenges. Fewer insurance companies cover their customers who rent cars internationally, so again, contact your company to learn if your rental is covered or not.
More people opt to buy the extra coverage when traveling abroad because of the increased risk of accidents due to different driving conditions and traffic laws. The additional coverage will also help you avoid the hassle of filing a claim in a foreign country.
The bottom line here is to make sure you don’t pay for more than you need, but don’t take unnecessary risks to save a buck either. If you rent cars often, you can update your personal policy to get more coverage that will protect you while you rent. And even if you don’t rent often, it’s still good to review your personal policy at least once a year.
If you need to update your auto insurance policy, look for a car insurance broker who’ll listen and get you coverage that suits your needs and your budget. Find an insurance broker near you, and start saving money today!