Most of us depend on our cars every day, and life can stop if you suddenly can’t use your vehicle anymore. you may have to rent a car to stay on the road and on schedule. but is rental car insurance required? no matter the reason for your rental, it is essential to protect your finances from the unexpected. bankrate has some tips on car rental coverage to help you navigate the many options available.
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When do you need rental car insurance?
Deciding if you need rental car insurance can be confusing. The type of coverage you have in your personal auto policy, the terms of your contract, and the reason you’re renting a vehicle can determine whether you should purchase additional rental auto coverage.
In most cases, the coverage you have on your auto policy will extend to a rental car as long as you rent a private passenger vehicle. In some scenarios, however, your personal auto policy may leave gaps in coverage that will cost you if you have an accident in your rental car. Most insurance professionals recommend exploring your options with your agent before driving a rental vehicle.
types of rental car insurance
Rental car insurance is somewhat similar to regular car insurance. You can select the type of coverage and level of coverage you want based on your needs. however, the types of rental car insurance are very different from auto insurance.
Before you get rental car insurance, you need to know your options. The most common types of car rental insurance include:
- loss damage waiver (ldw): sometimes called collision damage waiver (cdw), this is a waiver, rather than an actual policy. it essentially says that the rental company will not pursue you in the event that the rental car is damaged or stolen. however, if you have comprehensive auto and collision insurance, this may be included in your policy.
- Supplemental Liability Protection: This covers damage you do to other vehicles or property. however, your own liability insurance may cover these cases, even when driving a rental car.
- Personal Accident Protection: Personal Accident Protection covers medical costs for you and any passengers if you are involved in an accident. Again, if you have personal injury protection or medical payments coverage under your existing policy, you may already be covered.
- Personal Effects Coverage: This coverage pays for any belongings that may be stolen from your rental car. in this case, your homeowners insurance or renters insurance policy may offer similar coverage.
- allianz global: the allianz global rental car damage protector includes $50,000 in coverage, for only $11 per day, and offers coverage anywhere in the world. each policy includes up to $1,000 in coverage for lost luggage and personal items, and $1,000 in trip interruption coverage.
- bonzah: With a roamright plus car rental insurance policy from bonzah, you can get up to $35,000 in coverage, plus up to $500 in coverage for lost luggage and personal items, with no deductible and a 10 -day free trial period. bonzah also offers up to $1 million in supplemental liability coverage.
- rentalcover.com: rentalcover.com car rental insurance is intended to supplement insurance from your credit card provider. The company claims that drivers can get supplemental insurance for up to 50% less than an LDW waiver at the rental counter. One of the biggest draws is that drivers can cancel their rental insurance for a full refund up until car pick-up time.
- sure: sure is a mobile-based rental car insurance company that is completely digital. By downloading the app, you can select your travel dates, the type of coverage you want, your deductible, and more. that means you can update and make changes to your options on the go. Each policy comes with great benefits like puncture protection and reimbursement for lost keys.
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While there are many different types of rental car insurance, it doesn’t cover everything. For example, you would not use this type of policy to be reimbursed for the cost of renting a car while your regular vehicle is being repaired as part of a claim. in that case, you’d use what’s known as rental car reimbursement coverage, another option that’s included in most typical auto insurance policies.
you don’t have any type of insurance
Driving without any auto insurance is illegal in most states and could land you in serious legal and financial trouble. To comply with the law and avoid putting yourself at financial risk, it’s important to have adequate coverage when renting a vehicle.
According to financial expert Laura Adams, “If you don’t have auto insurance, you should purchase a liability and damage waiver for at least one rental car. If you have a non-owners auto insurance policy, it only covers liability, so you need to buy damage protection.”
Some uninsured drivers rely solely on the auto rental coverage provided by their credit card company. Although car rental coverage through your credit card may be helpful if you already have a primary insurance policy, it may not offer adequate protection as the only means of insuring your rental vehicle. Before you decline additional damage protection, you can call your card issuer for more information about their rental car coverage policy.
does not have collision or comprehensive coverage
If you don’t have collision and comprehensive coverage on your personal auto insurance policy, you should consider purchasing an LDW. Suppose you have liability only on your personal auto policy and you cause an accident in your rental vehicle without an LDW. in that case, the car rental company can sue you for damage to the rental car since your personal policy will not cover it.
“If you also have comprehensive and collision auto insurance, these cover physical damage and can extend to a rental car. however, state laws vary, so be sure to check with your insurance company,” says adams.
adams says, “knowing whether you should buy rental car insurance depends on the type of coverage you already have or don’t have. For example, if you have liability coverage, it follows you when you rent a car. Liability protects you from a lawsuit if you cause injury to someone or their property.”
you’re going on a business trip
If you’re going on a business trip in your personal vehicle, your auto insurance policy may have some limitations. For example, if you were in an accident while driving to a conference or large meeting, you may not be covered. the same applies if you have a customer or work tools in your vehicle.
Some auto insurance companies exclude coverage when you use your personal vehicle for business purposes. others may extend coverage, but only in certain situations or for specific occupations. To make sure you’re adequately covered, you can check with your agent before renting a car for a business trip.
doesn’t want to pay a deductible
If you rely on your personal auto insurance to protect your rental car and you have an accident, you’ll pay a deductible. however, if you purchase rental car insurance and have a collision, there is no deductible required.
how much does rental car insurance cost?
The cost of rental car insurance depends on a few factors. For one thing, it depends on the company you buy coverage from. It also depends on the state, what type of car you are renting, and how many miles you drive. buying additional coverages will also increase the amount you pay.
Does my credit card offer car rental insurance?
many credit card companies offer car rental insurance as one of the benefits for cardholders. however, rental car insurance provided by your credit card company is usually secondary insurance. That means if you’re in an accident or your car is stolen, your auto insurance company will get the bill first. if that’s the case, your deductible will be applied to the claim.
There are some credit card companies that offer primary auto rental insurance, though it’s less common. Primary insurance doesn’t go through your personal auto insurance, so you don’t have to pay a deductible. You can call your credit card company to determine if your card offers rental car insurance and what type of insurance they offer.
Most major credit card companies, such as Visa, MasterCard, and American Express, offer some type of car rental insurance for their cardholders. to take advantage of the coverage, you usually have to pay for the rental car with the card and rent the car in your name.
Which insurance providers offer car rental insurance?
Most major auto insurance providers automatically provide rental car insurance coverage at no additional cost beyond what you’re already paying for your monthly premium. however, it is important to remember that the coverage you have on your policy will also apply to your rental. If you only have liability on your personal auto policy, you may want to consider bridging the gap with an LDW.
Some companies offer independent vehicle rental coverage policies. The rates for these policies may be cheaper than a standard auto policy, but the coverage provided is not as strong.