Does a Person Need Auto Insurance to Rent a Car?

By Contributing Writer

  • Overview

    Does a Person Need Auto Insurance to Rent a Car?
    When you rent a car, you need auto insurance just as you do when you drive your personal vehicle. However, when you are offered insurance coverage by the car rental agency, you may wonder if you are getting the coverage you need or wasting money on coverage you don't need. Learning a little bit about the insurance coverage you already have and the coverage offered by the car rental company will help you get the most value for your insurance dollars.
  • Identification

    Your personal auto insurance policy may cover a car rented for personal use. If the car is used for business, though, your personal auto insurance policy may not cover you or the rental car. Also, if you do not have collision and comprehensive coverage, you won't be covered while driving the rental car, so you will need to buy additional coverage. Your homeowner's insurance may also provide some coverage for your rental car, especially if you have a home/auto umbrella policy. Check with your insurer to ask what sort of coverage you have.
  • Potential

    If you use a credit card, the credit card company may provide some insurance coverage for your rental car. Call your credit card company and ask if rental car insurance is a benefit offered by your card. The coverage offered by the credit card company may cover damage to the rental car, but not damage to other vehicles or property; bodily injury and death may also not be covered. Towing often is covered. Also, be aware that your credit card company may change your automatic coverage for rental cards without notice. Always contact your credit card company to inquire about the coverage currently in effect.

  • Solution

    If you do not have adequate coverage on your personal auto or home insurance policies, you should buy the comprehensive and collision insurance offered by the car rental agency. The minimum coverage offered may meet the minimum legal requirements, but still be inadequate to cover the expenses of a major accident. The maximum coverage offered by the rental agency will be $1 million per occurrence, and is a safer option. Cost ranges from $7 to $25 per day, depending on the agency and the type of car you rent.
  • Other Types

    Car rental agencies will offer you a Collision Damage Waiver or Loss Damage Waiver, except in states where this coverage is included in the rental price. This waiver relieves you of responsibility for the rental car if it is stolen or damaged. But such waivers are not true insurance, and do not apply to damage that results from driving the car off-road, or if damage occurs while you are breaking the law ---by exceeding the speed limit or being under the influence of alcohol or drugs, for instance.
  • Considerations

    If you or your passengers do not have health insurance, consider buying the additional Personal Accident insurance offered by the car rental agency to cover ambulance and medical bills. Cost ranges from $3 to $5 per day. You may also purchase Personal Effects insurance to cover theft of your personal property from the car. This can be useful when you travel with valuables. However, you will have to document the ownership and value of your items in order to receive compensation. Cost for coverage ranges from $2 to $4 per day.
  • Things to Remember

    So that you can take advantage of all your auto insurance options when renting a car, verify your existing insurance and shop for additional coverage before you depart on your trip. If you plan to drive your rental car across a national border, be sure you tell the rental agency. Also make sure that you are aware of what insurance coverage is required by law in the country where you will be traveling. Finally, be aware that when you buy insurance coverage from a car rental agency, that insurance is your primary coverage and your personal policy is secondary coverage.
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