Before you rent a car, contact your agent to find out how much collision and liability coverage you have on your vehicle. In most cases, the coverage and deductibles you have on your personal Automobile Insurance policy would apply to a rental car, providing it is used for pleasure and not business. However, keep in mind, when renting a vehicle you have to sign a contract which could potentially make you liable for extra expenses which are not automatically covered under your auto insurance such as:
- Loss of Use Costs the rental car company incurs when a damaged auto is out of commission and cannot be rented out.
- Diminished Value that the rental car company incurs when they sell an auto that was previously damaged and they receive less than what they would have if the auto had not been in an accident.
- Other Miscellaneous fees.
The best time to make the decision about whether you will need extra rental car insurance is before you’re standing at the car rental counter. Read on to learn about car rental insurance considerations and what you need to know to make sure that you’re covered.
Rental Insurance Coverage
It’s not uncommon for rental car agencies to offer you the opportunity to purchase additional auto coverages, but do you need them?
The best way to cover yourself when renting an auto is to purchase the Collision Damage Waiver (CDW), or Loss Damage Waiver (LDW). This relieves you of financial responsibility if your rental car is damaged or stolen. It also covers gaps such as described above for Loss of Use, Diminished Value and Other Miscellaneous Fees.
Additionally, your credit card company may include some collision and theft protection if the rental car is paid for with your card. This includes coverage for “loss of use.”
Non-Owner Auto Liability
If you don’t have comprehensive and collision coverage on your own auto, you will not be covered if your rental car is stolen or if it is damaged in an accident. If you plan to rent a vehicle frequently, your best bargain is to purchase a Non-Owner Auto Liability insurance policy from us.
A Non-owned Auto Liability insurance policy covers you for damage that you may cause to someone else’s car and liability for injuries to its occupants, or to pedestrian, in the event of an accident. The policy will also provide medical payments coverage for you and your passengers, and under-insured and uninsured coverage. This pays for the cost of an accident involving a hit-and-run driver or a driver who has little or no insurance.
However, Non-Owned Auto Liability insurance does not provide collision or comprehensive coverage. Collision coverage pays for damage to the car you’re driving if you crash into another car or object, or the car rolls over. Comprehensive pays for damage to the auto if ‘other than collision’ occurs such as theft of the auto or hail damage.
Umbrella Liability Policies
In addition to a Non-Owned Auto Insurance policy, an Umbrella Liability policy is also an option to meet the underlying auto insurance policy requirements when renting a vehicle.
If you drive an older vehicle, but plan to rent a luxury vehicle, it’s important to make sure that your policy will cover the complete cost of the replacement value of the vehicle you are renting.
If you are renting a vehicle that is not classified as a passenger car (such as a moving truck, 15-passenger van, etc.), you must purchase a separate policy from the rental company to be covered in that vehicle.
In general, your U.S. auto insurance does not cover you abroad. However, your policy may apply when you drive to countries neighboring the United States. Check with our agency to see if your policy covers you in Canada, Mexico, or countries south of Mexico.
Car rental agencies overseas usually provide auto insurance, but in some countries, the required coverage is minimal. When renting a car overseas, consider purchasing insurance coverage that is at least equivalent to that which you carry at home.
Also, if you are renting a car abroad, you may need an international driver’s license.