Understanding Your Existing Coverage
While most personal car insurance policies include some rental car insurance, the details of the policy vary. Before you rent a vehicle, confirm the details of your coverage, including:
- Existing Coverage Levels. Check the limits of your existing policy. How much coverage is included? Under normal circumstances, individual car insurance policies can extend to rental cars borrowed for personal use.
- Coverage Levels Available for Rentals. Not all car insurance coverage can be applied to rental vehicles. Ask about what coverage is available for rental vehicles. This benefit is generally only available when the vehicle is rented for personal use rather than for business use.
- Type of Car Insurance in the Policy. Basic car insurance policies may not include comprehensive insurance or collision insurance. It is wise to understand if these are part of your existing policy or not, as they may then apply to any vehicle you rent as well.
- Coverage for Loss of Possessions. Vehicle insurance plans do not often contain provisions for loss of possessions. If this is included in your policy, it may also extend to your possessions lost or stolen from a rental car. If loss of possessions is not included in your regular car insurance policy, it will also not be available if your possessions are lost or stolen from a rental car.
- Additional Riders. Some car insurance policies contain additional riders that allow for expanded protection in rental situations.
Credit Card Coverage
Insurance for rental cars may be provided partially through the use of a credit card. Your existing credit card may contain provisions for rental car damage or loss, or for loss of possessions from a rental car.
Generally, rental car insurance coverage becomes available only after other sources of insurance have been exceeded. It is often only available on a secondary basis. Check with your credit card company first before making any assumptions about coverage offered. Coverage is only available through a credit card when the card is used to pay for the rental vehicle.
Coverage from Physical Rental Locations
In the U.S., physical car rental locations must offer some form of insurance protection as required by state laws. The shop where you rent the car will offer coverage for rental cars in their possession. This coverage generally does not apply to the loss of your valuables within the vehicle.
Coverage varies. Common forms of coverage offered at rental car locations include:
- Loss Damage Waiver. A loss damage waiver (LDW) provides coverage for damage done to the rental vehicle. They remove the financial responsibility from the renter in the event of damage, theft, or loss of the rental car under circumstances not directly caused by the renter. This insurance coverage is valuable for those whose personal insurance does not provide the necessary coverage.
- Liability Insurance. Liability insurance is required by state laws in the U.S. However, the levels provided by the rental companies may not be sufficient to cover the needs of the renter. Further liability insurance can often be purchased by the rental car provider, through a third-party service, or your existing individual car insurance policy.
- Personal Accident Insurance. Medical bills for the driver and passengers riding in the rental car are not covered under liability insurance. Personal accident insurance or personal injury protection is necessary to cover these expenses. Your existing insurance plan may provide some coverage for these bills.
- Personal Effects Coverage. Loss or theft of your valuables from a rental car is not covered by standard rental car insurance policies. This extra coverage can be purchased from the operator when renting a vehicle.
Car Share Service Insurance
Members who are registered for a car-sharing program generally have insurance coverage available, but the specifics of the policy vary based on the individual service. In most cases, insurance coverage is included in the normal membership fees for all people registered in the car-sharing program. Coverage may be limited to liability-only, or maybe more expansive, depending on the individual program.
Car share programs do not have standardized insurance practices. Check with your program or any program you intend to participate in to understand what coverage they offer and what you may need to pay for separately to boost your protection.
Peer-to-Peer Car Share Insurance
With a peer-to-peer car rental service, coverage is unpredictable. The renter may choose not to have coverage at all to reduce the cost of the vehicle rental. Because of the varied nature of insurance coverage through peer-to-peer services, it’s vital to look into the conditions of the rental closely before agreeing to the terms.
ABC Dennis Insurance Agency
ABC Dennis Insurance provides clients with vehicle insurance to meet their needs. If you have not reviewed your car insurance this year, please call our office at (813) 949-7765 or email us.
Besides auto insurance, we can help with all your insurance needs. As an independent agency, we find the best insurance coverage with the most competitive rates. So, we shop multiple insurance carriers to find the coverage that best fits our customers’ every need.
Rental car insurance (Insurance Information Institute)
What Your Credit Card Does (and Does Not) Cover for Rental Cars (Money)