If you have car insurance, most insurance companies will extend coverage to your rental vehicle. But, the amount of coverage they will extend is what you need to figure out. We recommend calling your local, independent insurance agent or company to examine your policy.
Here are more answers to common car rental insurance questions.
- Does my car insurance cover a rental car to travel?
If you’re traveling and need a car, your car insurance will most likely extend to the rented vehicle. Each insurance company does this differently, but many have a coverage territory of the U.S., Canada, and Mexico. Although, if you’re traveling to Mexico, you will want to read more about how their government may not recognize your insurance in section three, below.
- Do I need extra insurance when renting a car to travel?
If you have car insurance, most insurance companies will extend coverage to your rental vehicle. But, when you get to the car rental counter, you will most likely be presented with extra protection options. Sometimes these overlap with your existing personal car insurance coverages, meaning you could potentially pay for the same thing twice.
Here are some examples of existing auto insurance policies that can extend to your rental car.
- Damage Waiver: Typically waives your responsibility for damage of the rented vehicle, conditional on the rental agreement. If your auto insurance includes collision coverage and comprehensive coverage, you may already have coverage for this.
- Personal Accident Insurance: Typically covers medical expenses in the event of an accident. Most car insurance policies include a medical payments coverage, which pays for qualified medical expenses for you and the passengers in your vehicle involved in the accident. However, if your medical payments coverage limits are low, you may want to consider adding this coverage.
- Personal Effects Coverage: Usually covers damage to personal items in the rented vehicle. Your car or homeowners/renters insurance may cover this. Depending on the items, you may already have coverage if your belongings are damaged in your rental vehicle.
- Supplemental Liability Protection: Provides extra liability protection to your existing car insurance liability coverage. Most car insurance policies include liability coverage, but when you purchase your policy, you choose a limit. If you selected a low limit, you may want to consider paying for the rental company’s supplemental liability protection.
Sometimes, despite all these options, there may still be gaps in your insurance for a rental vehicle:
- Rented Automobile Replacement: Some car rental companies specify in their agreements that if you total one of their vehicles, it must be replaced with a new vehicle. This endorsement will replace the rented vehicle with a new one. Otherwise, you could be on the hook for replacing it.
- Loss of Use – Rental Fee Reimbursement: If you damage your rental vehicle the rental agreement may require you to continue paying the daily or weekly rental fee. This endorsement will pay the fee that would have been paid if the rental vehicle had not sustained damage.
- Rental Gap: If you are in an accident in your rental vehicle, the rental car company may handle repairing or selling the vehicle in a few different ways. If the company repairs it, they may charge you for a perceived loss in value, since the vehicle is now damaged and therefore worth less. Alternatively, if they sell the vehicle after repairing it, they may charge you for diminished value, which is the difference in the vehicle’s value before the damage and the amount the rental company was able to sell the vehicle.
- Will I have coverage if I travel out of the country?
Generally speaking, you can travel to Canada, the U.S. and its territories/possessions and your car insurance will still extend to your rental vehicle.
However, if you travel to Mexico, the Mexican government does not recognize U.S. car insurance. So, your insurance company may be able to pay for covered damages if you’re in an accident, but the Mexican government may not recognize your insurance. This is why you may want to purchase Mexican car insurance so that you will not be fined and penalized for not having insurance.
If you are planning a trip to Europe, you will likely need to purchase rental car insurance. For many U.S.-based insurance companies, if you travel overseas, your car insurance will not apply to a rental vehicle. This means you will probably want to purchase insurance from the car rental company.
- What if somebody else drives my rental car?
If you include somebody that’s not on your car insurance policy on the rental agreement, things get more complex. This is because their insurance coverage for rentals may be different. If you are involved in an accident, and they are the driver, it will likely be their insurance coverage that applies.
So, even if you do your homework, if your friend is also on the agreement, and has insurance that doesn’t cover all these situations, you may find yourself underinsured.
- Does my car insurance cover a rental car to replace my damaged vehicle while it’s being repaired?
Broadly speaking, most car insurance policies include some sort of coverage for a rental while your vehicle is being repaired.
Some auto insurance policies specify that if you are renting a vehicle as a replacement, the coverages for the vehicle it is replacing apply. Meaning, if the vehicle that is having repairs only has liability coverage; then only liability will extend to your rental. If you have collision and liability coverage on that vehicle, then your rented vehicle will also have the same coverage.
Again, not all insurance companies handle rentals the same, so it’s a good idea to ask how your car insurance extends to rentals.
You can read the original post from Auto-Owners Insurance here.