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Rental Cars and Insurance - Things You Need to Know



Before Leaving on Vacation


Make sure your insurance identification card is in the car. Double-check that phone numbers for your insurance company and agent are listed on the identification card. If not, make note of these numbers to keep with your ID card and bring it with you.

Rental Cars


If your car was damaged due to another driver’s negligence, the other driver’s insurance company should pay your rental car costs for a reasonable length of repair time. If your car is totaled, many companies will pay for your rental as a courtesy, but they are not required to do so.

If you are filing a claim with your own insurance company, the cost of a rental car will only be covered if you paid a premium to include rental reimbursement coverage in your policy. Most polices have a dollar limit for rental payments, so check your policy.

Things to Consider about Insurance Renting a Car 


Car rental companies offer several different insurance options that your existing policy may already cover. They typically offer the following products at the counter:

Collision Damage Waiver is also referred to as a Loss Damage Waiver. If you have comprehensive and collision coverage on your own car, you will likely not need this additional protection. (Comprehensive insurance covers vehicular damages caused by accidents such as fire, theft, wind, hail or a run-in with a deer, vandalism, or theft. Collision insurance covers the cost of repairs or the actual cash value of the vehicle, if damaged in a crash or rollover.) This protection can cost an extra $10-$20 a day.

Liability Insurance covers medical expenses and damages to another person’s property as a result of a car accident caused by the insured’s negligence. If you are adequately insured on your own car, you may consider forgoing this additional liability protection. This supplemental insurance can cost $7-$14 a day.

Personal Accident Insurance offers coverage to the renter and passengers for medical bills resulting from a car crash. If you have adequate health insurance and disability income insurance, or are covered by personal injury protection under your own car insurance, you will likely not need this additional insurance. It usually costs about $1-$5 a day.

Personal Effects Coverage provides for the theft of personal items inside the rental car. If you have a homeowners or renters insurance policy, it generally covers this already. If you frequently travel with expensive jewelry or sports equipment, it may be more cost-effective to purchase a floater under your home or renters insurance policies so the items are fully protected when you travel. Generally, this coverage costs $2-$5 a day.

More Car Rental Insurance Tips:


If your current policy doesn’t offer coverage for a rental car, see if an insurance rider can be added for a small fee.

If you lack personal auto insurance and your credit card does not provide benefits, it might be wise to purchase the liability insurance and collision damage waiver at the car rental counter.

Keep in mind that if it is a longer-term rental (e.g., a week, a month or more), there might be limitations on the coverage your existing auto insurance policy provides. Check with your insurance company or agent for details.

If you don’t own a car, you might want to consider purchasing a non-owner auto insurance policy, because it provides benefits in addition to coverage for a rental car.

Carefully review your auto insurance policy and check with your credit card issuer about auto insurance benefits. Many credit cards include some level of collision and theft protection. In most cases, these benefits are secondary to your personal auto insurance or the car rental company’s insurance, meaning the credit card company will only pay claims after other insurance coverage has been exhausted.

Rental Cars and Insurance - Things You Need to Know Reviewed by Brandon on 10:20 PM Rating: 5

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