Renting a car can be an efficient way to get around, particularly if you lack access to one. Unfortunately, most rental vehicles only come equipped with state minimum liability coverage.
Credit cards often offer additional coverage to their cardholders. Furthermore, most personal auto policies provide coverage for rental car services as well as dedicated rental car policies.
Insurance Requirements
Assuming you already possess adequate coverage, in most instances you won’t require rental car insurance. But the salesperson at the rental car counter will try to sell you theirs anyway, with liability policies typically offering cover for damages to and injuries to both cars involved and medical costs for you or any passengers in an accident resulting from you causing it; these typically provide up to $300k of bodily injury liability per person as well as $1 million property damage liability (this differs from collision and comprehensive policies which usually come as part of standard auto policies).
Credit card companies and auto insurers frequently offer rental car supplemental coverage through credit cards or auto insurers, providing personal accident protection that covers ambulance expenses, medical care and death benefits if involved in an accident. It may also include collision and loss damage waiver (CDW), which releases rental companies from being responsible for fixing damaged vehicles (although they may impose a deductible fee). It is wise to thoroughly research both your own coverage as well as those offered by credit cards before accepting this coverage.
Rental car companies also provide additional liability coverage at a daily fee, which will increase limits above state minimums significantly. Although this coverage isn’t always offered with all cars, major national car rental firms usually provide this feature.
Loss of use coverage is also available under some auto policies and should provide compensation for lost income while your car is at the shop being repaired or replaced, though not always as part of its regular premium price. Not all providers provide this additional feature and it may incur additional fees beyond its usual premium charge.
At RamseyTrusted, it is best to speak with an independent local professional who can review your existing auto policy and advise if there is adequate protection against rental cars in it. If it does not, we can assist in finding an insurance plan which fits both your needs and budget.
Credit Card Coverage
There are different types of credit card rental car coverage, depending on the card you possess. Some may provide coverage for theft or collision while others only cover liability – it’s best to review both policies and terms to understand which are covered before renting a vehicle.
Personal auto policies typically provide some coverage for leisure car rentals if they do not cost more than retail value of your vehicle. This coverage typically includes liability coverage to protect against bodily injury and property damage you cause to other drivers, collision and comprehensive coverage to repair or replace it if damaged, theft and vandalism as well as collision and comprehensive coverage for repairs if the rental vehicle becomes damaged or stolen – it is advisable to speak to your provider to ensure adequate coverage as rules differ depending on where you reside.
Another option for coverage is purchasing an individual rental car insurance policy that provides collision and comprehensive loss coverage. These can often be purchased at rental car desks; however, their costs can quickly add up if you rent frequently. There are also various credit cards such as Chase and American Express which offer primary coverage as a benefit of card membership; these may cover you primary against costs related to rentals but may require you to decline rental company’s insurance. These may only pay out if personal policies don’t cover claims in full.
Before opting for credit card rental coverage, it is a good idea to call your insurance provider and verify that it provides sufficient coverage and covers any claims incurred. Note that certain cards offer up to 30 days of coverage in the United States while longer coverage periods abroad. When filing claims against credit card providers, make sure you know which documentation will be necessary; copies of rental agreements as well as police reports could all be needed.
Additional Driver Requirements
When renting a car and planning to let someone else drive it, rental companies usually require them to be authorized drivers. This means being present for pickup at time and having their name listed as such; otherwise they would be considered unofficial and could face significant financial liabilities should an accident occur. Some people are automatically pre-authorized such as spouses/travel companions/ employees from businesses renting cars through company accounts as additional drivers – or family members depending on state laws.
If your personal auto policy doesn’t extend to rental cars, additional driver coverage can be purchased at the rental desk. This may include liability coverage for damage done to other vehicles and property as well as medical payments coverage that covers any injuries sustained during an accident as well as collision coverage that repairs or replaces damaged rental cars if involved in an incident.
Price for rental car agency-provided insurance may differ, depending on which coverage options are selected; however, typically it’s much less costly than purchasing insurance directly from rental car companies (which can range up to $13 a day for equivalent coverage).
An alternative option could be using a credit card that provides rental car insurance at no cost for the primary cardholder, providing up to $75,000 of primary coverage per vehicle – far surpassing what most rental car companies provide as their minimum liability protection.
One drawback of this approach is that your credit card must be used only to pay for the rental car and cannot be used for purchases made during your trip. Furthermore, your card must be in good standing without past-due balances or unpaid debts – otherwise your provider could refuse coverage in case an accident or damages occur that involve an additional driver.
Rental Company Coverage
An agent from a car rental company may try to sell you additional insurance coverage at the counter, but it’s essential that you understand exactly what is being offered. These agents aren’t employee service personnel – they’re salespeople with commissions tied into every extra added onto your bill. It is also worth keeping in mind that their recommendations of coverage packages may not necessarily be necessary or worthwhile investments.
Many supplemental policies offered by rental car companies aren’t actually insurance, but rather add-ons that provide different forms of protection, such as collision damage waiver, supplemental liability protection, personal accident insurance and personal effects coverage. Although some of these may provide significant advantages over time, others can simply be costly wastes of money.
Collision damage waivers provide protection from being responsible for the cost of repairing an accident caused by you, while supplemental liability protection covers bodily injuries to others as a result of negligence on your part, while medical payments coverage (also referred to as personal accident insurance) covers drivers and passengers medical expenses in case of an incident.
Personal effect protection, usually available as an add-on policy, can be an ideal solution if your homeowner or renter insurance doesn’t cover personal belongings coverage. With this policy in place, any stolen items from a rental car would be reimbursed in full.
Roadside assistance should also be considered; typically available as an add-on at an extra fee, this covers such costs as towing, lost keys and flat tires – though this coverage should not be seen as insurance policy coverage.
In most instances, non-owner car insurance policies will not provide sufficient coverage when renting cars from third-party rental car agencies. If your policy has an extensive liability limit or comprehensive and collision coverage that extends to rental cars, purchasing rental car coverage offered by credit card companies or rental desks could be worthwhile in terms of savings from not filing claims on your auto policy that would drive up premiums.
