Rental Car Insurance: An Expert Guide (2024)

When renting a car, you may think that your existing auto insurance policy provides enough coverage for you and the vehicle. However, this is not always the case.

Suppose you have an existing auto insurance policy. In that case, it pays to read the fine print before signing on the dotted line. For example, your policy might limit the kind of vehicles it covers, and some rental companies require additional coverage beyond what a standard policy typically provides.

Even if you have the best car insurance, purchasing additional coverage at the rental car counter can be beneficial in protecting yourself financially in case of an accident or theft.

Is rental car insurance worth it? This guide will explain everything you need to know about rental car insurance to help you make a suitable decision.

What is rental car insurance?

Rental car insurance is a type of car insurance coverage specifically designed to cover the cost of rental vehicles. This coverage typically includes collision and comprehensive insurance, which covers damages caused by an accident or theft.

Some policies will also include liability coverage, which can help protect you from paying out-of-pocket in case of a third-party injury claim or property damage claim.

Read more: What is the difference between a first-party claim and a third-party claim?

Does my insurance cover rental cars?

The answer to this question varies depending on your specific auto insurance policy. Generally, most standard car insurance policies will only cover rentals if you have added rental coverage to the policy.

If you are unsure, it is best to call your insurer and ask if there is an additional cost for rental car coverage or if it is included as part of your existing policy.

Additionally, some credit card companies provide secondary rental car protection when you use that card to pay for the rental. It is important to carefully read your credit card policy, as coverage can vary between companies.

It is also beneficial to check with the rental car company about its specific rules and regulations regarding the type of coverage it requires before renting a vehicle. For example, some companies may require that all drivers purchase liability insurance and any other pre-existing coverage they might have.

Overall, it is essential to understand what kind of insurance coverage you have and what additional coverage may be necessary when renting a vehicle. This will help ensure you are adequately protected in case of an accident or other unexpected scenario while on the road.

Different Types of Rental Car Insurance

What coverage do you need for a rental car? Various rental car insurance policies are available, depending on the type of coverage you need. Generally, there are three main types of car rental insurance coverage:

• Collision and comprehensive coverage: Covers any damage to the vehicle due to an accident or theft. Do you need collision insurance on a rental car? It is beneficial to have in order to protect the car from damage. This type of policy usually requires a deductible before any benefits can be accessed.
• Liability coverage: Protects you from third-party property damage or bodily injury liability claims while driving a rented vehicle.
• Personal accident insurance (PAI): Covers medical bills if you are injured in an accident while renting a vehicle.
• Personal effects coverage: Covers any personal belongings damaged or stolen from inside the rental vehicle.

It is important to note that some policies may include all three types of coverage, while others may require you to purchase each type of coverage separately.

Additionally, some rental car companies may require additional insurance on top of your existing policy. Therefore, it is best to speak directly with the rental company before renting a car to ensure that you have adequate coverage.

No matter which type of coverage you select, it is essential to carefully review all terms and conditions of the policy before purchasing.

Which companies offer insurance for a rental car?

If you want to buy rental car insurance on your own, the good news is that several companies provide this form of coverage. Here are all of your options:

• Allianz Global Assistance Insurance: Offers Rental Car Damage Protector, covering up to $75,000 in damages. This is primary coverage, meaning it pays out before your own auto insurance and includes 24-hour emergency assistance. It costs $11 per day.
• Bonzah: Provides insurance starting at $7.99 per day that will pay for repairs or replacement of the vehicle, up to $35,000. Travel abroad is also covered depending on the policy’s details, which is primary coverage.
• Insure My Rental Car: Offers loss damage waivers with coverage up to $100,000. Prices start at $9.75 per day, and the policy provides primary coverage.
• Rental Cover: Offers no-deductible policies that also count as primary coverage. Coverage options vary depending on the country, and prices are not listed on the website, though it claims to be cheaper than what is offered at rental desks.
• Sure: Provides rental car insurance for up to $100,000 worth of damage to a vehicle, plus any belongings inside. This includes flat tires and lost keys. Prices are not listed online, but you can get an online quote.

It is important to note that each company policy provides primary coverage, meaning you will file a claim with the above companies before your insurer. If you choose to use your own car insurance for a rental instead, you will be responsible for any deductibles and could see your rates rise at your next renewal.

Best Questions to Ask Before Buying Rental Car Insurance

Before you buy rental car insurance, it is important to ask yourself the right questions in order to make sure you are getting the best policy for your needs.

The following are some of the key questions to consider when looking into rental car insurance:

What exactly will the rental car insurance policy cover?

Before signing any agreements, it is important to make sure you understand what your rental car insurance policy covers.

Generally, a rental car insurance policy will provide coverage for physical damage and liability protection in case of an accident. It may also include additional benefits, such as theft protection and supplemental liability insurance.

It is best to double-check your policy details to know exactly what type of coverage you have purchased.

How much is the deductible?

Another key question to ask yourself when looking into rental car insurance policies is how much deductible you will be responsible for if an accident occurs.

Your deductible is how much you would need to pay out-of-pocket before being covered by the rental company’s insurance policy. The higher the deductible, the lower the premium, so it is vital to understand the trade-off and make sure you are comfortable with whatever deductible you choose.

How much rental car insurance coverage do I need?

Ask yourself how much car insurance you need for each situation. For example, if you only plan to rent cars occasionally, then you may not need a policy that covers multiple rentals or long-term rental periods. However, if you rent cars frequently, a more comprehensive policy may be necessary to ensure that all your rental needs are covered. 

It is also good to research the types of car insurance discounts available from different providers to get the best possible rates.

Understanding all of these factors before making a decision can help ensure that you purchase the right rental car insurance policy.

What’s the maximum limit of the collision loss damage insurance?

The maximum collision loss damage limit will depend on the type and amount of coverage you purchase. Generally, each policy has a set limit, although some providers may offer higher limits depending on certain factors.

It is important to check with your insurer and confirm the maximum limit before committing to any particular policy. We recommend comparing at least three different car insurance companies in order to get an idea of what the standard limits are for various policies. This way, you can get the best coverage for your needs without going over budget.

Finally, it is also important to understand that the maximum limit of the collision loss damage insurance does not necessarily equate to full coverage.

Even if a policy has a high limit, deductibles and other exclusions may apply. Therefore, it is always beneficial to research and review any rental car insurance policy thoroughly before signing up for it to ensure that you have adequate coverage at an affordable price.

Is this rental car insurance primary or secondary coverage? 

It is important to understand whether your rental car insurance policy is primary or secondary coverage to make sure that you are adequately covered. So, what is the difference between primary and secondary car insurance coverage? Rental car insurance from the counter is typically considered secondary coverage, meaning it kicks in after other primary insurance policies have been exhausted.

This means that if you already have your own auto insurance or a credit card policy with rental car coverage, the rental company’s policy will only cover what the other policies do not.

On the other hand, some companies offer primary coverage so that their customers can save money by avoiding purchasing additional insurance from the rental company. Before buying primary rental car insurance, these companies usually require that the customer has some form of auto liability and/or comprehensive car insurance coverage on their own personal vehicle.

Review your other insurance policies to determine what type of coverage they offer and if any gaps need to be addressed.

Are “loss of use” costs covered by this rental car insurance policy? 

Whether or not a rental car insurance policy covers “loss of use” costs will depend on the specific policy you purchase. Generally, these policies provide some coverage for loss of use, but the amount and type of coverage can vary from one policy to another.

For example, some policies may only cover minor expenses related to loss of use if there is a delay in getting the rental vehicle back to the provider, such as an extra hotel night or meal expenses. Other policies may offer more comprehensive coverage, including reimbursement for lost wages and other travel-related expenses.

Is the entire rental car covered?

A collision loss damage insurance policy typically covers the entire rental car. This includes visible and hidden damage to the vehicle caused by an accident or other event.

In addition to the actual repairs to the vehicle, most policies also cover any associated costs, such as deductible payments, additional mileage charges for using a replacement vehicle, and lost wages during repair time.

It is important to check with your provider before signing up for a specific policy to make sure that you understand what type and level of coverage it provides.

Some providers may offer additional benefits such as roadside assistance or reimbursement for rental car upgrades if yours needs to be replaced due to an accident-related incident.

Are there any exclusions to be aware of? 

You should be aware of a few exclusions when considering rental car insurance.

First, most policies will exclude any damage caused by illegal activities or vehicle misuse. For example, if the driver is found to be intoxicated or has engaged in reckless driving, this type of damage may not be covered.

Second, many policies exclude damage deemed as “normal wear and tear,” such as minor scratches or dents caused over time due to regular use. It is important to check with your specific policy to determine what types of damage may not be covered.

Finally, some providers may also exclude any claims related to theft or vandalism. Be sure to read the policy carefully before signing up to make sure that you understand all of the exclusions.

Be sure to read through your policy details and ask questions if necessary so that you know exactly what type of protection is included in your plan. By understanding rental car insurance policies and their coverage, you can be sure that you are adequately protected in case of a mishap while renting a car. 

Case Studies: Rental Car Insurance

Case Study 1: John’s Rental Car Accident

John rented a car for a weekend trip and declined the rental car insurance offered by the company. He believed that his personal auto insurance policy would cover any damages. Unfortunately, while driving, John got into an accident and caused significant damage to the rental car and another vehicle.

When he contacted his insurance company, he learned that his policy did not cover rental cars. As a result, John had to pay out-of-pocket for the damages to both vehicles, which amounted to thousands of dollars.

Case Study 2: Sarah’s Stolen Rental Car

Sarah rented a car for a week-long vacation. She opted for the rental car company’s insurance coverage, thinking it would provide adequate protection. During her trip, the rental car was stolen from a parking lot.

Sarah filed a police report and informed the rental company. Thanks to the insurance coverage she purchased, Sarah was not held responsible for the value of the stolen car. The rental company took care of the financial aspect, and Sarah did not have to pay anything extra.

Case Study 3: Mike’s Credit Card Coverage

Mike used his credit card to pay for a rental car. He was aware that his credit card company offered secondary rental car protection. While driving, Mike accidentally damaged the rental car by hitting a pole.

He reported the incident to the rental company and then contacted his credit card company. After reviewing the claim, the credit card company covered the repair costs, and Mike didn’t have to involve his personal auto insurance or pay any deductible.

Case Study 4: Lisa’s Additional Liability Coverage

Lisa rented a car for a road trip with her friends. She already had a comprehensive personal auto insurance policy that covered rental cars. However, the rental car company required additional liability coverage.

Lisa decided to purchase the extra coverage from the rental company to comply with their rules. During the trip, Lisa accidentally rear-ended another vehicle. The rental car insurance covered the damages to the other vehicle, and Lisa’s personal auto insurance covered the damages to the rental car.

Rental Car Insurance: The Bottom Line

Rental car insurance can be a great way to protect yourself from potential financial hardship in the event of an accident or other unforeseen circumstances. However, it is important to understand your policy and what type of coverage it provides before signing up for one.

Be sure to read through the details carefully to know exactly what type of protection you are getting. Additionally, check your other insurance policies for gaps in coverage and consider any additional benefits that your rental car insurance company may offer.

Taking the time to research your options and familiarize yourself with different rental car insurance policies can save you from experiencing financial hardship should something go wrong during your travels. With this knowledge, you can feel confident knowing you have the proper protection for your rental vehicle