Does car insurance cover me when I drive a rental car?

Skip the coverage at the counter if your car insurance already covers rental cars

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You’ve picked a rental car and are ready to zoom off on vacation. Then the representative at the desk asks if you want rental car insurance.

As it turns out, most people won’t need rental car insurance. The rental car insurance you’re offered at the counter is not required, and certain types of coverage may be unnecessary if you’re already be covered by your own insurance.

Am I covered when I drive a rental car?

Rental car insurance, also called car insurance for rental cars, covers you in case something happens while you’re driving your rental car. You can be covered for car accidents, medical payments after an accident, hitting someone’s property and more.

You may be covered by insurance in several ways when driving a rental car.

  1. Car insurance. Your car insurance policy typically covers you for driving rental cars.
  2. Credit card. If you’ve paid for your rental car with plastic, your credit card may offer some insurance for rental cars.
  3. Home or renters insurance. Most policies cover items you own even if they’re not in your home.
  4. Travel insurance. Travel policies might come with rental coverage and personal contents coverage.
  5. Health insurance. Your health insurance would typically pay for medical costs after an accident.

If you’re not covered with one of those options, it’s time to consider separate coverage.

  1. Separate rental policy. Add on any coverage to protect the rental car if you’re not already covered. You can get liability, collision, personal contents coverage and more.

How does my car insurance cover driving a rental car?

Any coverage levels you have on your existing policy should extend to a rental car — just as long as you’re not using the rental for business.

For example, the same liability limits you have on your own car insurance policy will cover you for your rental car. Your car insurance may also have some medical coverage if you have medical payments coverage or personal injury protection.

Check your policy documents to find out how your coverage extends to driving a rental car. Typically, policies will cover:

  • Repairs to the car
  • Towing the rental to a repair shop or the rental location
  • Loss of use for the rental company while the car is being fixed
  • Diminished value if the car is now worth less
  • Fees, deductibles and claims

When would my car insurance not be enough?

There are a few coverage exceptions to watch out for. In these cases, it pays to call your insurer to find out your options. Consider taking out the extra rental coverage offered by your car rental company if you’re not covered through your personal auto insurance policy.

  • You own a car that’s much cheaper than the rental. Your car insurance covers you, but only up to your coverage maximums. If you only have $10,000 in liability and total a brand new rental car, your car insurance might not be enough to cover the damages.
  • You have liability-only car insurance. Low limit insurance is great for a beater, not so much for a newer rental car. Add collision coverage through the rental company to be fully covered.
  • You have a high deductible. If your current policy has a deductible of $1,000 or more, you’d have to pay that before getting reimbursed for damage.
  • You have a commercial insurance policy. A business auto policy typically won’t extend to driving a rental car for personal use.
  • You’re renting a car for business use. Likewise, your personal policy usually won’t cover a rental car you use for business.
  • Someone else drives your rental car. Typically you’ll need to let the car rental company know who will be driving the car. Uninsured drivers will need coverage.
  • You rent a luxury car. Luxury rental cars aren’t always covered by car insurers. If you’re renting a high-end car like a Maserati or Lamborghini you should probably check with your insurer before turning down coverage from the rental company.
  • You’re driving outside the US. Most car insurance won’t cover you if you’re driving to Canada, Mexico or anywhere else abroad.
  • You rent an RV or motorcycle. Most insurance companies will also cover motorcycles, but not every one insures other vehicles — so the rental coverage benefit might be excluded for these types of vehicles.

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How does my credit card cover rental cars?

If you pay for your car rental with your credit card, you might get some basic benefits for your car rental. Typically that might include theft, collision and towing costs — and sometimes medical bills and personal property.

However, you might have limits to the amount of time you’re covered for and the amount, which is typically $50,000.

Ask your credit card provider if the benefits are primary or secondary. Many cards offer coverage as secondary, or when you’re not covered by other insurance, such as driving a rental car abroad or for business trips. For example, both Visa and Mastercard offer this coverage as secondary to your primary car insurance, with some exceptions.

Coverage may be excluded depending on the country you’re in, while other countries may require a collision waiver. Check with both your credit card provider and the rental company ahead of time to avoid confusion.

How does home insurance cover rental car theft?

Most home or renters insurance policies have off-premises contents coverage, which means your personal belongings are covered even if they’re not in your home. That means your luggage, electronics and other items in the rental car would be covered through your home or renters insurance.

How does travel insurance cover rental car damage?

Your trip insurance might cover rental car collision damage, or damage to the rental car. If not or you didn’t purchase travel insurance, consider adding a loss damage waiver from the rental company.

How does health insurance cover rental car accidents?

Your health insurance can cover any medical bills if you’re in an accident in your rental car. This may be helpful to combine with your car insurance, since MedPay and PIP can help cover car accident costs, including your health insurance deductible.

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Do I need to buy extra rental coverage?

The main reason you should buy rental car insurance is if your own policy doesn’t protect you. Even then, you might decline rental car coverage. For example, you may feel your belongings are easily replaceable; in that case, you might decline personal effects coverage.

Generally, your existing insurance will cover rental cars — but it’s a good idea to be sure. Check your own policy or call your insurance agent. And keep in mind that if your insurance does cover rental cars, you will still have to pay your deductible in case of an accident or any damage.

What kind of rental car coverage can I get?

You’ll likely come across four types of rental car coverage:

  • Personal accident insurance
  • Collision damage waiver
  • Personal effects coverage
  • Supplemental liability protection

How do I buy rental car insurance?

When you rent a car, the representative at the counter will ask whether you’d like to add insurance. To make a smart decision, it’s a good idea to know beforehand what your personal insurance already covers.

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How to protect yourself from a rental car claim

It’s not often that a car rental company will make a damage claim against you, but it can happen. And if it does, you could be on the hook for hundreds or even thousands of dollars in damage if you’re not covered by insurance. So you’ll want to be protected.

Here are some steps you can take to protect yourself from a possible damage claim from the rental company:

  • Inspect the rental car with an employee and note in writing all of the existing damage, no matter how minor.
  • Take pictures of any damage before leaving the lot and make sure the photos are time stamped.
  • Take pictures again once you drop the car off and make sure the photos are time stamped.

Even if you are covered against damages by insurance, it’s a good idea to take precautions and insure you’re not held liable. Some rental companies even require that you inspect the car before they turn over the keys.

What should I do if a rental car company files a claim against me?

If you weren’t able to document any existing damage before and after you had the rental, you’re not out of luck. A few ways you can contest the claim include:

  • Requesting time stamped photos of the car immediately before you rented it and immediately after you turned it in.
  • Asking if the car was rented out again after you turned it in and before the claim letter was sent to you.

Putting a little bit of heat on the rental company to provide evidence could pay off and save you a ton.

Bottom line

You probably won’t need to buy rental car insurance. However, it can be a smart choice if your personal car insurance lacks coverage in certain areas.

Questions about rental car coverage

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