Do You Need Rental Car Insurance?
This is a common question and simply put, the answer is… “it depends”. There are a few factors to consider when deciding whether or not to buy rental car insurance. For starters, every State has different laws and each rental car company has a different contract, so it’s up to you to make sure you know what you are signing.
When at the rental car counter, they will typically offer you two different coverage waivers:
- Physical Damage Waiver – which covers damage to the car itself
- Liability Waiver – which covers resulting damage to the other person’s car and medical bills if you are at fault in the accident
- You can purchase these waivers individually or together.
In general, your personal auto policy will extend physical damage and liability to a rented vehicle within the limits of your current coverage.
For example; if you have a $500 collision deductible and liability limits of $300,000, you would have this same coverage while driving a rental.
However, it’s important to note – if you have only liability coverage on your own vehicle, you will need to purchase the Physical Damage Waiver. If you have collision or other than collision coverage on at least one vehicle, then that same coverage would carry over from your policy to the rental vehicle.
With that being said, a lot of people do not take the insurance from the rental car agency because their personal auto policy will extend coverage to the rental car.
Also, if you charge the cost of the rental car on a credit card, your credit card may include rental car loss damage waiver as a cardholder benefit.
What May Not Be Covered
However, there are a few things you will want to understand that are potentially not covered:
- Some rental agreements can hold you responsible for “loss of use”. If the car is in the shop for repairs, the rental company may charge for the vehicle’s downtime.
- Some rental agreements can hold you responsible for “diminution in value”, meaning the reduced resale value of the vehicle after an accident. Most personal auto policies will not cover this.
- If you do not purchase the waivers, you may need to file a claim through your personal carrier, pay deductibles, and spend time sorting through the loss details, which could disrupt your trip.
- If you are renting a U-Haul or another large truck, you will most likely need the rental agency’s insurance due to personal auto policy weight limits.
- Personal auto policies typically cover travel only in the USA, its territories, and Canada. International travel usually requires coverage through the rental agency.
If you are confused by any of this – feel free to contact our agency. Safe travels!!
