Understanding rental car insurance


  • If you already have liability insurance or collision insurance, it will extend to rental cars.
  • Your credit card may also provide primary or secondary auto insurance coverage.
  • If you don’t have auto insurance and you frequently use rental cars, consider auto insurance for non-owners.
  • Check out the insider’s guide to the best auto insurance companies.

Holidays and summer vacations are usually when most people use rental cars and prices go up. In addition to the higher prices, the cost can increase even more if you have to buy a rental.

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. However, you may already have the coverage you need.

Personal auto insurance can cover your rental car

If you already have third party liability or collision coverage, it will extend to rental cars in the United States and, depending on your insurance company, possibly in Canada and Mexico, Josh Damico, vice president of operations for insurance at Jerry, Insider said. Comprehensive and collision coverage generally extends to rental cars.

Collision insurance repairs your car if it is damaged in a collision with another vehicle or object. Car accidents usually happen when collision coverage is involved. Comprehensive insurance covers damage caused by theft, fire, vandalism, natural disasters, as well as civil liability for injuries.

Damico said it’s best to check with your insurance provider, as some carriers exclude rental cars to keep costs down. In addition, he said not to confuse “rental reimbursement coverage” with car rental. Your staff

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Rental reimbursement coverage applies if you are involved in a covered loss and offer a rental car while your personal vehicle is being repaired. This does not apply to outings to rent cars.

* Most states require some type of liability coverage

Home and tenant insurance covers the theft of personal property in car rentals

If you have home insurance or renters insurance, it will cover any personal property stolen from your personal vehicle or rental car due to a burglary.

Home and tenant insurance covers the theft of your personal property, even if it occurs outside of your home. If your personal laptop is stolen while you’re at a coffee shop, homeowners ‘and tenants’ insurance will cover it. If your laptop was stolen from your car, home and renters insurance will cover the theft of the laptop, but not your car damage or theft.

Does your credit card cover your rental car?

The short answer is that it depends. Damico said credit card companies offer primary or secondary auto insurance coverage, but most only pay if the vehicle is damaged or stolen. He said you need to check with the credit card you are using to reserve and rent the vehicle and ask if the coverage is primary or secondary.

the Insurance Information Institute said most credit card coverage is usually secondary insurance,[s] after using your personal insurance policy or the insurance coverage offered by the rental car company. “

Damico said if you don’t own a car and don’t have primary car insurance, secondary credit card coverage won’t help and you will need to purchase insurance from a rental company.

Some credit card issuers like Pursue freedom, indicate that “if you do not have personal automobile insurance or any other insurance, this cover reimburses you for the costs of theft, damage or administration and loss of use imposed by the rental company, as well as reasonable towing charges that occur while you are in charge of the vehicle.However, it does not provide liability coverage if you are involved in an accident and damage another vehicle or injure its driver and passengers.

If you travel a lot and use rental cars, Damico recommends that you purchase auto insurance for non-owners. Auto insurance for non-owners is basically liability coverage for drivers who do not own a car.

Take out rental car insurance with the car rental company

If you do not have primary coverage through personal auto insurance, primary credit card coverage, or auto insurance for non-owners, then you will need to purchase insurance from the company. car rental.

These are the types of coverage that may be available to you, depending on the Insurance Information Institute:

  1. Damages Waiver (LDW) – also known as Collision Damage Waiver (CDW) “is not technically an insurance product – it is designed to relieve or” exonerate “renters from their financial liability if their car is damaged. rental is damaged or stolen “.
  2. Liability Coverage – Rental car insurance companies are required by law to provide minimum liability coverage, but this coverage is often not sufficient.
  3. Personal Effects Coverage – covers personal effects stolen from the rental car. If you have home or tenant insurance, you can decline this coverage.

Damico said purchasing insurance from the car rental company can cost anywhere from $ 10 to $ 30 per day, and if you take all three it could cost more than renting the vehicle itself.

What about carsharing programs like Zipcar or Turo?

Companies like Zipcar offer hourly rentals of a variety of vehicles and typically include the cost of insurance in membership fees. Zipcar website states that it offers secondary insurance coverage. The Insurance Information Institute said that “if the car is involved in a collision or is stolen, the renter may be charged for a specific amount which is stated in the membership agreement.”

Turo is different from Zipcar because instead of cars being owned and managed by a company, consumers rent a car from an ordinary person, like an AirBnB for cars. Turo offers liability insurance for car owners (guests) through Liberty Mutual.

If you don’t have personal auto insurance and frequently use carsharing programs, you should consider auto insurance for non-owners as your primary coverage.

Risks of doing without rental car insurance

If you don’t have personal auto insurance or auto insurance for non-owners and decide to forgo the rental car company insurance, you are liable for any damage. If you have a car accident involving another vehicle, you will also be liable for such damage and injury and could be subject to legal action.


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