If you're going on vacation or getting your car serviced, you'll almost certainly need to hire a car. However, many consumers are unaware that their motor insurance policy does not cover rentals by default. You'll need rental car insurance to receive the coverage you require.
Rental car insurance protects drivers against financial liability while driving a rented car for a limited period. While your rental car provider will provide this coverage, you may already be covered under your existing insurance plans or by your credit card.
Different insurers can also provide equivalent coverage.
Not all rental car insurance policies are made equal, just like typical auto insurance. You might not know what you're searching for if you've never acquired rental car insurance before. In this post, we'll go through the many forms of rental car insurance and help you figure out which one is best for you.
What are the types of Rental car insurance?
The insurance for a rental car is identical to that of a regular car. Based on your demands, you can choose the type of coverage and the degree of coverage you want. Rental car insurance, on the other hand, is not the same as vehicle insurance.
You should be aware of your options before purchasing rental car insurance. The following are the most prevalent types of rental car insurance:
Loss-and-damage waiver (LDW): This is a waiver, not a policy, known as collision damage waiver (CDW). It states that the rental company will not pursue you if the rental car is damaged or stolen. If you have collision and comprehensive car insurance, however, this may be covered under your policy.
Additional liability insurance: This insurance covers any damage you cause to other people's vehicles or property. Even if you're driving a rented car, your liability insurance may cover you.
Personal accident insurance: If you and any passengers are injured in an accident, personal accident protection pays for your medical bills. You may already be insured if your existing insurance includes personal injury protection or medical payments coverage.
Coverage for personal effects: This insurance covers any personal belongings that are stolen from your rental car.
Your homeowner's or renter's insurance policy may provide equivalent coverage in this scenario.
While rental car insurance comes in a variety of forms, it does not cover everything. You wouldn't utilize this type of policy, for example, to get paid for the expense of renting a car while your regular vehicle is being repaired as part of a claim. In such a case, you would use rental car reimbursement coverage, which is another option provided in most standard auto insurance policies.
When should you take up rental car insurance?
It's not always easy to tell when you'll require automobile rental insurance. You might be tempted to avoid renting a car if you only need it for a few days. Some people's own automobile insurance policies cover rental cars automatically. So, when is it necessary to have a separate rental car insurance policy?
If you don't have auto insurance, at the very least, you should get liability and a damage waiver for a rental car. Because your non-owner auto insurance coverage only covers liability, you should add damage protection to your coverage. It is illegal to drive without auto insurance, and you could face significant legal and financial consequences.
It's also a good idea not to rely on your credit card company's rental car insurance because it's usually insufficient coverage in the event of an accident.
Purchase an LDW if your auto insurance policy does not provide collision and comprehensive coverage. If you get into an accident or something else happens to the automobile that causes damage, your coverage will not cover the repairs. Physical damage is covered by collision and comprehensive auto insurance, extending to a rental automobile.
State laws differ, so double-check with your insurance provider.
Keep in mind that liability coverage is included in all auto insurance policies, and it protects you in the event you cause an accident and are sued.
The type of coverage you already have or don't have will determine whether you should get rental car insurance. If you have liability coverage, for example, it accompanies you when you hire a car. If you injure someone or their property, liability protects you against a lawsuit.
If you're using your vehicle on a business trip, your auto insurance coverage may have some restrictions.
Another factor to consider is if you're renting a car for work or personal travel. If this is the case, your current personal auto insurance policy may not cover you. It's recommended to buy rental car insurance if you're unsure. You'll be pleased you did because even slight damage can be costly to fix.
Cost of rental car insurance
You'll have to pay a deductible if you use your auto insurance to safeguard your rental automobile and get into an accident. However, if you get rental car insurance and are involved in a collision, you will not be required to pay a deductible.
Several factors determine the price of rental automobile insurance. For starters, it is dependent on the insurance company from whom you get coverage. It also depends on the state, the type of vehicle you're renting, and the distance you'll be traveling. Adding additional coverages to your policy will raise your premiums.
How to get rental car insurance for yourself
Many credit card providers include rental car insurance as part of their customer benefits. Your credit card company's rental automobile insurance, on the other hand, usually is secondary.
That means that if you have an accident or your car is stolen, your auto insurance provider will be the first to be billed. If that's the case, the claim will be subject to your deductible.
Although it is uncommon, some credit card issuers provide leading rental car insurance. You won't have to pay a deductible because primary insurance is separate from your personal auto insurance.
You can call your credit card provider to see if they offer rental car insurance and, if so, what kind of coverage they provide.
Major credit card issuers, such as Visa, MasterCard, and American Express, provide rental car insurance to their cardholders. To use the coverage, you must generally pay for the rental car with your credit card and rent the automobile in your name. Most major auto insurance companies give rental car insurance coverage, making it relatively simple to obtain.
State Farm, Allstate, Geico, and Farmers all include rental car insurance coverage in their standard auto insurance policy.
If you're insured, there's no extra charge on top of what you currently pay for your monthly premium.
As previously indicated, your auto insurance policy may include coverage similar to the loss-and-damage waiver, extra liability protection, or personal accident protection. However, not all auto insurance policies are equal, and as a result, not all policies cover rental cars. It usually comes with comprehensive and collision coverage and additional safeguards with higher amounts of coverage.
If you're unsure whether you're protected, the best thing you can do is read your auto insurance policy or directly ask your insurance representative. Review your auto insurance coverage or contact your insurer about how much rental car insurance you might require before your next trip.