For many, the summer season is marked by cross-country road trips, adventures to previously unexplored places, and outdoor getaways.
In preparation for your adventure outside your comfort zone, exploration may be easier with a rental car. While we often plan ahead in choosing which rental car company to use and where to pick up our ride, we tend to overlook the unexpected question: Are you covered in the event of an accident?
While your personal auto insurance covers your vehicle, does it extend to a rental car?
Keep reading to find out!
What is Rental Car Insurance?
When you visit your rental car company to pick up your vehicle, they tend to offer optional rental car insurance. Coverage through a rental car company often falls into five categories:
- Collision damage waiver (CDW) or Loss damage waiver (LDW): A loss or collision damage waiver releases you from responsibility if your rental car is damaged. This also includes acts of vandalism and theft.
- Liability: Covers you for damages or injuries you cause while behind the wheel of the rental vehicle.
- Personal accident insurance (PAI): Protects you and your passengers against injuries sustained while driving a rental car.
- Personal effects coverage (PEC): This will cover any personal items that may be stolen from the rental vehicle, such as a left-behind purse or luggage.
- Roadside assistance: Covers emergency roadside expenses, including lost keys and travel assistance.
While you are not required to enroll in the rental car company’s insurance coverage, it is essential to understand whether you are covered in the event of an accident or an unexpected incident.
Does My Car Insurance Cover Rental Cars?
When being offered coverage for a rented vehicle by the rental car company, you may feel pressured or obligated to choose their insurance coverage.
But we have some good news – you may already be covered!
Many personal auto insurance policies already include rental car coverage, so you may be dishing out money for coverage you don’t need.
Before renting a vehicle, consult your insurance agent to determine if your auto policy covers rented vehicles.
Here are some key questions to ask:
- How much liability, comprehensive, and collision coverage do I have on my vehicle? Does that apply to rental cars?
- If I have roadside service coverage, are towing fees extended to my rental vehicle?
- If items are stolen from my rental car, does my homeowners or renters’ insurance policy cover the lost items?
- Will my personal injury protection and/or medical payments coverage extend to an accident in a rental vehicle? (Note: this coverage is only in select states)
Car Insurance Coverage for Rental Cars: Is It Necessary?
Insurance acts as protection in the event of the unexpected. While we tend to cross our fingers and toes that an accident doesn’t happen, it’s always best to have a backup plan in place.
While our personal auto policies can extend to rental cars, adding rental car coverage can be a beneficial investment in specific scenarios.
High Deductibles
If, in the event of an accident, you have to pay a high deductible through your personal auto policy, rental car insurance may be beneficial, as they often carry low or, in some cases, no deductible.
Avoid Claims on Your Personal Policy
When you file a claim on your insurance policy, you may be putting yourself at risk of a rate increase and a higher premium when renewal season comes around. With rental car insurance, you would file a claim directly with the rental car company, thereby saving a claim on your policy.
No Comprehensive or Collision Coverage
Perhaps you have an older personal vehicle, and it’s not worthwhile to invest in comprehensive or collision coverage. By adding a loss-damage waiver through rental car insurance, you can protect against any physical damage to the vehicle without adding coverage to your personal policy.
Low Liability Coverage
Rental car companies will often require a minimum amount of liability coverage. If their minimum exceeds your liability coverage, it’s worth investing in additional coverage to ensure you are protected in the event of an at-fault accident.
Always Prepare for the Unexpected
At Auto Money Title Loans, we believe in ensuring that you are covered in the event of the unexpected. Whether an emergency finds you in our office needing some extra cash, or a potential accident in a rental car has you questioning coverage, we are here to help!
*Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as financial advice. We are not financial advisors, and the content provided does not constitute financial advice from a licensed professional. The content of this blog post does not replace personalized advice from a licensed professional who is aware of your individual circumstances.