Does Car Insurance Cover Rental Cars

Does car insurance cover rental cars? Picture this: you’re at the rental car counter, long line behind you. Great weekly rate secured, ready for a family vacation.

Then, handed a clipboard with a complex rental car contract, confusing insurance choices. Regret sets in; maybe less time packing, more on rental car insurance research.

Rental car insurance can be confusing; not a daily concern. It’s easy to feel overwhelmed when faced with coverage choices.

Keep reading for essential facts on rental car insurance, and whether additional coverage is necessary alongside your personal auto insurance.

Does Car Insurance Cover Rental Cars
Image source (Piktochart)


What Is Rental Car Insurance?

Rental car insurance applies when you rent from companies like Enterprise Rent-A-Car.

At the airport or another location, they’ll ask if you want insurance or not.

Don’t confuse it with rental reimbursement coverage, which reimburses fees when your car is being repaired. It’s an add-on to your auto insurance.

Car sharing platforms like Turo are different from traditional rental companies. Specifics vary by state for these platforms. Check your policy or contact us before declining coverage to know how it applies.

Do I Need Rental Car Insurance

The most common question when it comes to renting a car for domestic travel is, “Do I need rental car insurance coverage?” The answer is: it depends.
You want to make sure you and your rental vehicle are covered, but you also don’t want to pay for unnecessary duplicate insurance coverages that could double the price of your rental.

How To Tell If You Need Rental Car Insurance Coverage

Before renting a car, the initial step involves reviewing your auto insurance policy or reaching out to us to ascertain the extent of rental car coverage already provided.

Typically, the coverages applicable to your personal vehicle, including physical damage and liability coverages, generally apply to your rental car within the United States.

In the event of an incident, these coverages can potentially contribute to covering damages to the rental car and liabilities to others.

If the rented car is of a similar value to your personal vehicle and you are renting within the U.S., it is probable that your existing auto insurance coverage will be sufficient.

However, if you are opting for a high-value vehicle, such as a sports car, for a lavish beach weekend while leaving your 2008 family sedan at home, considering the additional auto insurance coverage offered by the rental company might be a prudent decision.

Does Car Insurance Cover Rental Cars?

Does Car Insurance Cover Rental Cars
Rental car insurance is a type of insurance that protects you if you rent a car and are later liable for hitting another vehicle. It would also cover damage or theft involving the rental car itself: Image source (Sapling)
Your regular auto insurance typically covers rental cars for personal use, protecting against mishaps and damages.
However, it may not extend to work-related activities. Check your policy for potential gaps before considering extra rental coverage.
Be aware that your insurance might not cover expenses like the “loss of use” fee from rental companies.
Consider a Loss-Damage waiver (LDW) for added peace of mind, especially for luxury cars.


Do You Need Car Insurance To Rent a Car

Good news! Not having car insurance won’t put the brakes on your plans to rent a car, especially when you’re considering renting from companies like Enterprise.
While it’s true that rental agencies roll out a variety of protection plans to shield you in case of an accident, there’s a catch.
If you happen to be operating without personal auto insurance, you’ll likely be required to optin to some type of liability coverage. Think of it as your safety seatbelt for those just-in-case moments.

Does My Credit Card Provide Rental Cars Insurance

Many credit cards offer a level of rental car insurance when you pay for the entire rental with your card and decline additional coverage from the rental company. The two main types of coverage are primary and secondary. Primary coverage handles damages to the rental car regardless of other insurances, while secondary coverage only kicks in after your other polices, such as your personal auto policy.

Both types usually cover rental vehicle damage, not liability. Make sure you have proper liability protection elsewhere. To ensure the details of your card’s benefits and coverage, reach out to your credit card company when using it for payment.

Read more: What is business owners insurance?

What Is Covered Under A Typical Rental Car Insurance Policy?

Most rental companies have a short, predictable suite of rental vehicle insurance offerings. It’s a good idea to know the policy of the rental company before you arrive at the counter.

Check your personal auto insurance policy to determine if you’re already properly covered and are able to decline the offered coverage from the rental company.Rental car insurance is usually broken out into the following coverages:

  • Liability coverage
  • Personal accident insurance
  • Collision Damage Waiver (CDW)/Loss Damage Waiver
  • Personal Effects Coverage

Rental Car Coverages You Might Need

Collision Damage Waiver (CDW)/Loss Damage Waiver

This is not an insurance product, but rather a waiver that transfers financial responsibility from you to the rental car company in case of damage or theft.

In most cases, collision damage waivers also provide coverage for “loss of use” if the rental car company charges for the time a damaged car cannot be used because it is being repaired.

Personal Effects Coverage

Having a homeownersrenters or condo policy usually extends coverage for your personal items, even if they are stolen from a rental car.

It’s important to be aware that the coverage kicks in only after any applicable deductible is met.

Consider the value of the items you will be taking with you. If the cost to replace them is below your deductible, your policy won’t provide coverage.

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