Rental Car Insurance: Does My Insurance Cover It?

It’s a situation many of us have found ourselves in: you’re at the rental car counter, checking in to pick up a vehicle you booked months ago. But before you can check out, you’ve got a question to answer: are you buying supplemental insurance coverage, or will you decline it and wonder if you should have taken it?

To be fair, it’s not a question with an easy answer. There are many factors to consider before choosing whether to accept or decline additional rental car coverage. But looking into it ahead of time, learning about what to expect and having a good understanding of car insurance – as well as your own personal policy – can help make your decision easier.

Not sure if you should hand over the extra cash for coverage? Here are a few details to keep in mind, so you can help protect yourself without wasting money:

Does My Current Car Insurance Cover a Rental?

The first factor that should influence your decision is your existing car insurance coverage. Take the time to review your coverage. What sort of comprehensive, collision and liability coverage do you have? Does it extend to rental cars you may drive? In many cases, your existing policy will cover rental vehicles — at least to some extent. If you aren’t sure if your car insurance policy covers rentals, check with your agent or insurance representative.

Do I Need the Auto Coverage Offered by the Rental Agency?

You’ll need to look at the types of coverage the rental car company is offering and requires. Is it coverage that your existing policy doesn’t provide, or does it overlap with your personal insurance in most areas?

Rental car agencies typically offer extra coverage for the following options:

1. Liability coverage to help protect you if someone is injured or there is property damage as a result of an accident that’s your fault. There’s a good chance your existing policy covers this already. Check your policy to determine if you could benefit from supplemental liability protection from the rental car company.
2. Personal accident insurance to help pay you and your passengers’ medical bills if you’re injured in a rental car accident. Your existing policy and personal health insurance may provide coverage comparable to what the rental company is offering.
3. Personal effects coverage may help cover your personal belongings, such as a cellphone or clothing, if they’re stolen from your rental car. If you have renters or homeowners insurance, these items may already be protected.

Car rental companies also offer non-insurance products called waivers. Collision damage and loss damage waivers aim to waive certain fees and expenses if the rental car is stolen or in a collision. These waivers are only effective if you’re not violating any laws (such as speeding, driving while intoxicated, etc.) when the incident occurs.

Does the Type of Car I Rent Matter for Insurance Coverage?

It’s also important to consider the type of vehicle you’re renting and, perhaps more importantly, how similar it is to[…]

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