What Is Covered Under A Typical Rental Car Insurance Policy
Most rental companies typically have a short, predictable suite of rental vehicle insurance offerings. Know the policy of your rental company before you arrive at the counter. Check your personal auto insurance policy to determine if youre already properly covered and are able to decline the offered coverage from the rental company.
Rental car insurance is usually broken out into the following coverages:
- Liability coverage
- Collision Damage Waiver /Loss Damage Waiver
- Personal Effects Coverage
Personal Effects Insurance Coverage For Rental Cars
Personal effects coverage helps pay for the costs of replacing or repairing belongings in your rental car that were stolen or damaged. If you have homeowners or renters insurance, it most likely will cover your stuff if its stolen or damaged in your rental car, subject to your deductible.
A smart preventative measure is to remove your things from your rental car when youre not in it. If you have very valuable items like jewelry, talk to your insurance agent to increase the limits your personal policy will pay if these items are lost or stolen.
Quick takeaway: Do you need rental car personal effects coverage? Probably not, depending on your existing homeowners and rental coverage.
But if you have high deductibles on personal effects losses, weigh the rental car cost for this coverage versus your potential loss.
Liability Insurance Supplement Vs Your Liability Insurance
Liability insurance for bodily injury and property damage is almost always required nationwide, so if you have car insurance, you’re likely already covered. Additionally, car rental companies are required by law to include at least the state minimum coverage, so you don’t have to worry about driving off the lot without coverage.
When deciding whether to purchase a rental company’s liability insurance supplement, consider the fact that you may be driving more while you’re on vacation than you would normally, in an unfamiliar car on unfamiliar roads. We recommend carrying at least $25,000 of bodily liability insurance per person, $50,000 of bodily liability per accident and $25,000 of property liability , as lower limits may not cover the full costs of a crash.
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Rental Car Insurance Vs Your Own Auto Insurance
Here are the typical insurance options from rental car companies, along with how to determine if you already have coverage within your own auto insurance policy.
Coverage from your own policy applies when you are using a rental car for personal, nonbusiness purposes. The rules may be different for business use of a rental car. Check with your insurer or employer for details about coverage when using a rental car for business.
Does Renters Insurance Cover Temporary Housing
Renters insurance policies may provide coverage for temporary housing if a tenant’s rental unit becomes uninhabitable due to an insured event, such as a fire, severe storm, or other covered peril.
In these cases, the policy can provide financial assistance for living expenses incurred while seeking alternative housing.
Most renters insurance policies will cover up to a certain dollar limit for costs associated with temporary housing.
This includes items such as hotel stays and meals that are necessary due to the tenant having to leave their rental unit during repairs or rebuilding efforts after an insured event.
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If My Car Breaks Down Will Insurance Cover A Rental
Your auto insurance policy will only cover a rental car if your insured vehicle suffers a covered loss. Breakdowns dont count.
Edited byChris JenningsUpdated September 19, 2022
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Your auto insurance policy wont cover the cost of a rental vehicle if your car breaks down. But if youre involved in an accident and need to send your car to the shop for repairs, rental reimbursement coverage can help pay for the cost of a rental.
Heres what you need to know about rental reimbursement coverage:
International Car Rental Insurance
If you travel to Mexico or Canada, your personal insurance may or may not cover rental cars in those locations. Its a good idea to speak to your agent to find out before you go. Generally, standard auto insurance companies in the U.S. dont cover rentals abroad, so it may be wise to purchase rental car insurance in that situation.
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Sometimes Its Worth It
If you dont have coverage, such as if you dont own a vehicle or have protection through a credit card, you should purchase insurance either through the rental agency at the counter or a third-party provider before you pick up the car. Here are some cases when it may make sense to purchase rental car insurance from the car rental agency.
Collision Damage Waiver/loss Damage Waiver Vs Comprehensive And Collision
If you own collision and comprehensive coverage on your personal auto insurance policy, you can usually choose to decline this waiver, which typically costs about $9 to $19 per day in the U.S. But, your collision and comprehensive insurance limits should ideally cover up to the actual cash value of the rental vehicle for adequate protection.
Renting luxury vehicles
Your comprehensive and collision coverages cover the cost of repairs to a vehicle similar to your own. But if you’re renting an expensive car like a convertible or luxury car, your coverage might not pay for the full cost of repair after an accident.
The collision or loss damage waiver relieves you of financial responsibility for damage done to the rental vehicle. It also eliminates the fee a rental company might otherwise charge you for the loss of use of their vehicle while it is being repaired. Your collision and comprehensive policies often cover these costs, depending on the type of damage, but you should check your policy to make sure it doesn’t exclude loss-of-use coverage for a rental vehicle.
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Who Is Covered By Auto Insurance
Auto insurance typically includes a set of coverage types that protect you and your vehicle from various situations while driving. The complete coverage depends on the policy you choose and the additional covers you may add.
But generally, these protections follow your vehicle whether you’re the one behind the wheel or not.
However, there are instances that auto insurance will also follow the owner, covering a car that’s not listed in their policy. It’s vital to know when this is the case to assess the best circumstances for borrowing a car and be confident that you’ll have full insurance coverage.
How Much Car Insurance Do I Need
State laws mandate minimum levels of bodily injury liability and property damage liability coverages. However, most minimum requirements dont provide enough coverage to protect your assets. Financial experts often recommend carrying at least $100,000 in bodily injury coverage per person, $300,000 in bodily injury coverage per accident, and $100,000 in property damage coverage per accident.
Your state may also require you to carry other types of coverages, such as medical payments, personal injury protection, and uninsured/underinsured motorist coverages. If you finance or lease an automobile, you may also need to purchase collision and comprehensive coverages.
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Does Renters Insurance Cover Car Theft
Renters insurance policies can provide coverage for car theft, but it typically comes with certain limitations and may not cover the full replacement cost or other related expenses.
Standard renters insurance policies generally include Personal Property Coverage which provides protection for items owned by the tenant that are kept inside their rental unit.
This includes cars and other motor vehicles that are stored in the rental unit, such as boats, motorcycles, scooters, mopeds and ATVs.
However, its important to note that renters insurance is a type of property damage insurance and does not usually provide comprehensive protection in terms of liability.
In other words, if you were to cause an accident while driving a car or motor vehicle covered under your policy, your renters insurance would likely not provide any compensation for damages caused by your negligence.
For this reason, it’s important to be sure that you have adequate auto liability coverage either through a personal auto policy or through a specialty auto policy if necessary.
How To Know If Your Car Insurance Covers Rentals
In general, the insurance options offered by a rental company overlap with insurance policies you already have. However, each insurance policy is unique, and you should always check with your insurance agent prior to renting a car. When you talk to your insurance agent, explore the following coverages on your policy to determine whether you should purchase rental car insurance.
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How Does Rental Car Insurance Work With N26
Customers with an N26 bank account can use their debit card to rent a car at select rental car companies. N26 premium account holders automatically receive mobility insurance as part of their banking benefits. N26 Metal account holders automatically receive rental car insurance any time they rent a car abroad, and are covered for damages of up to 20,000.
Do You Need Rental Car Coverage
People often use rental cars for a short period it could be for a few hours or even a few weeks. So, why spend money on insurance coverage for a car youll only use for a limited time?
Rental car insurance coverage is usually a good idea. But its true that if you dont use it, coverage could seem like another redundant expense. Rental companies cover all vehicles with the states minimum coverage requirements, which usually include liability car insurance. But this only covers other drivers cars if youre at fault for an accident. Youll have to pay to fix the rental car out of your own pocket.
This is why rental car companies offer additional collision and comprehensive coverage.
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Is Rental Car Insurance Worth It
In many cases, it would be cheaper to increase your own insurance limits for a year than to buy rental car insurance for a two-week vacation.
To put these prices in perspective, even if you have a full coverage policy with high limits, you probably pay much less than $60 per day for your personal auto insurance.
Rental car insurance can be expensive it can easily double your rental costs if you purchase a full coverage package. You also technically dont need to purchase insurance since rental cars are automatically covered for the minimum requirements in their state. However, it can still be worth it in some situations.
For example, lets say you dont have insurance and you rent a car in California. The required minimum car insurance in California covers up to $5,000 in property damage to other vehicles if you cause an accident, but it doesnt cover damage to your rental at all.
In fact, no state requires any level of collision coverage or comprehensive insurance, which apply to your own vehicles repair bills. It can be a good idea to get rental car insurance if you just have the minimum coverage in your state. This is especially true considering you will probably be driving an unfamiliar vehicle in an unfamiliar area.
How Does Rental Car Insurance Work
Most rental cars come with some form of rental car insurance. even if its just a basic plan. In the event of an incident, youll pay an agreed amount, and the insurer pays the rest. For a small upfront increase in the price of the policy, you can usually reduce the excess amount youd have to pay.
Always check the fine print so you know what youre covered forand what youre not. For example, a collision damage waiver could cover costs for bodywork damage, but not for window repairs.
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Damage You Do To Others
At the counter: Supplemental liability protection will pay for damage you do to others vehicles or property. Typical limits range from $300,000 to $1 million. If you don’t have auto insurance , or if youre traveling in a country where your own policy doesnt offer coverage, you should buy this.
Your own policy: Your own liability insurance will typically cover you when youre driving rental cars within the U.S. and Canada. If you have minimal liability coverage on your auto policy, you could buy the supplemental protection to boost your coverage.
Does Your Insurance Cover Your Rental Vehicle
Typically, car insurance follows the car and not the driver. However, your insurance company may cover you if youve purchased additional liability insurance coverage, such as collision and comprehensive coverage. This add-on typically provides rental car coverage as well as liability coverage.
Besides additional insurance coverage, if youve paid by a credit card, your credit card company may provide primary or secondary coverage in the event of a rental car accident. Dont rely on your credit card company to help you financially after the accident, as many do not cover liability insurance.
In some states, insurance companies offer personal accident insurance, which provides coverage for you when you sustain injuries. It is similar to personal injury protection and covers medical expenses from a rental car accident.
Some rental car companies guide their clients on buying rental car insurance if youve purchased one, the rental car insurance may kick in and pick up the bill.
If you have rental car reimbursement coverage, the insurance company may reimburse you for the rental car payment you made before the accident, regardless of fault.
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Will Comprehensive Insurance Replace My Stolen Vehicle
Stolen vehicle claims are treated similarly to a total loss from an auto accident. Comprehensive insurance can provide protection up to the actual cash value of your vehicle, less your deductible. The ACV represents your cars current, depreciated market value not the price you paid for it.
Still owe money on your vehicle? Since the cash payout for a stolen car is based on its actual cash value not the amount you have left on your car loan you could be in a tough spot if your car is worth less than you owe.
Thats where ERIEs New Auto Security Coverage Endorsement* can help, by making up the difference between your insurance settlement and the remaining loan principal.
Some Policies Will Cover A Lot More Than Just Boarding
Furthermore, some renters insurance policies may offer broader protection when it comes to temporary housing.
For instance, they may provide coverage for unexpected living expenses beyond just hotel bills and food costs, such as transportation back home if a tenant needs to prematurely end their stay in temporary accommodation due to unforeseen circumstances such as serious illness or job loss.
Additionally, some policies might even include provisions for long-term living arrangements if a tenant cannot return to their rental unit because of extensive repairs or rebuilding efforts from an insured event.
Overall, renters insurance can provide valuable protection when it comes to dealing with temporary housing needs due to an insured event occurring in your rental unit.
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How Does Coverage Vary For International Rentals
Rentals in some countries may be excluded. For example, standard Visa and Mastercard coverage excludes rentals in Israel, Jamaica and Ireland. American Express wont cover in Italy, Australia and New Zealand. Aside from excluded countries, the good news is that if your personal auto policy doesnt cover you outside the United States, your secondary credit card coverage could become primary coverage automatically.
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What Do I Do If I Get In An Accident In A Rental Car
If you get in an accident while youre driving a rental car, you should take the same steps you would with any other accident: Report it to the police, exchange information with the other driver, and notify your insurance company.
Youll also want to report the incident to the rental car agency and arrange for a replacement rental car.
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Rental Car Insurance Coverage
If you have liability and comprehensive insurance for your personal vehicle, the coverage likely extends to instances when you are driving a rental vehicle in the United States. For this reason, it is likely that your existing auto insurance policy will adequately provide coverage for cars you rent within the country.
That said, other variations of rental car insurance does exist for those who need it, which we discuss in more detail in the sections below.
Cards With Primary Coverage
Interested in credit cards with primary rental car coverage so you dont have to use your personal auto insurance? Two popular general travel credit cards the Chase Sapphire Preferred® Card and the Chase Sapphire Reserve® are among the cards offering it. To qualify, you typically must be using a consumer card for personal travel and a business card for work travel. All the cards below cover rentals for a maximum of 31 days.
Many credit cards offer secondary rental car coverage. That includes the best travel credit cards.
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When Should You Opt For Rental Car Insurance
Sometimes its worth it to buy rental car insurance. This depends on if you:
Its up to you to do your research before renting a car.
Knowing how much your auto policy covers for a rental car will prevent you from signing on for coverage from the rental car company that you dont need. Itll save you money from paying for the same coverage twice.
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