Can You Rent A Car Without Owning Car Insurance
Yes. Most states require car rental companies to carry minimum coverage on the cars they own. So, even if you dont purchase coverage, you can legally drive a rental car. However, its strongly advised to have some insurance coverage because youll be responsible for paying for any damages that occur without it.
Do You Need To Buy Rental
This article was published more than 7 years ago. Some information may no longer be current.
Its been a long flight and the kids are cranky as you exit the airport toward the car rental office. You cant wait to get a car to get to that beach-side villa, the one you found a great deal on over the Internet. The car rental itself was dirt cheap, too, especially since you glossed over the added insurance on the website.
However, as youre signing for the car, the clerk behind the counter asks: Would you like the added insurance? Otherwise, youll be liable for the car. You freeze, your tired mind wondering what that even means. Im insured on this, you think. But are you? Do you get the added liability coverage or stick with your own insurance? There isnt one simple answer.
When you get to that desk, thats the last place you want to make that decision, says Steve Kee of the Insurance Bureau of Canada. Kee says that getting as much information about your own insurance before you go to the rental office is key to both protecting yourself and saving money, because the onus lies with the renter to ensure coverage for any claims. Whatever coverage you have is not necessarily the same as that of someone else.
Stephen Menon advocates getting the facts before renting, but his focus is on credit cards. Hes the associate vice-president for consumer card products at Toronto-Dominion Bank.
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Should I Get Insurance On A Rental Car
This can be a confusing situation, and the car rental agency may try to persuade you to purchase their insurance policy. The truth is, your own auto policy may already cover your rental.
Buying supplemental insurance from the rental company can add approximately $15 to $30 per day to the cost of the rental.1 However, if you already have an insurance policy on your own car, you may be covered in your rental vehicle.
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Do You Need A Collision Damage Waiver
Its wise to purchase this type of rental car insurance. While your regular car insurance policy may include collision coverage for rental cars, it most likely includes a deductible and may not pay for all the rental car companys charges, such as loss of use .ii Your credit card may include free collision damage coverage, but credit card rental car insurance is typically secondary coverage, meaning any claims will go first to your auto insurance company.
The most affordable way to ensure adequate protection in case of collision or theft is with third-party rental car insurance. The Rental Car Damage Protector from Allianz Global Assistance provides affordable collision loss/damage insurance coverage up to $75,000.
Unlike the waivers rental car agencies sell, the Rental Car Damage Protector is actual insurance that can protect your rental car almost anywhere in the world.
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Does My Car Insurance Cover Rental Cars
Yes, you can use your own car insurance for a rental car as long as your trip is for personal travel. Your personal coverage limits and deductibles will apply. If the trip is for business, your personal auto insurance policy might not cover any type of damage or injury unless you have commercial coverage. However, your company may have a commercial auto policy that can cover the vehicle.
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Rental Car Liability Insurance
Liability insurance covers damage to other vehicles, property and people as a result of accidents you cause when driving your rental car. Note that this does not cover you, your passengers or the rental vehicle itself.
The state minimum levels of liability insurance are included as part of the basic rental fee in almost every state. In these cases, any additional insurance you purchase will at most give you higher coverage limits. There are some exceptions, most notably in California, where rental companies are not required by law to include liability insurance.
- Average cost: $1016 per day
- Comparable to: Bodily injury liability and property damage liability insurance
You Are Going On A Business Trip
If you are going on a business trip in your personal vehicle, your car insurance policy might have some limitations. For instance, if you got into an accident while driving to a conference or a big meeting, it might not be covered. The same applies if you have a client or work tools in your vehicle.
Some car insurance companies exclude coverage when you use your personal vehicle for business. Others may extend coverage, but only in certain situations or for specific occupations. To make sure that you are adequately covered, you may want to consult with your agent before renting a vehicle for a business trip.
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Damage Is More Than Fixing A Dent
If you dont buy CDW, rental companies can charge for more than just fixing the damage. They also charge for:
- Loss of use, meaning the potential revenue lost while the car is out of service being fixed, even if the company had lots of other cars available. And they generally figure that daily loss at the full retail rate.
- Towing charges, if you are unable to drive the car back to the return station.
- Diminished value, or the potential loss of the cars resale value when the rental company disposes of it, usually within two years.
- Administrative fees associated with the claims process.
Most non-CDW car rental insurance will cover those extras. But, in some cases, coverage depends on cooperation from the rental companyand it may not be forthcoming, as our readers above wasnt.
How Does My Destination Impact My Car Rental Insurance Needs
While all car rental insurance policies are important, some are truly indispensable and will save you a lot of trouble in the event of an incident. A must-have is Third Party Liability Insurance, which covers damage done to other people or their properties. Another policy that you are strongly advised to add is the Collision Damage Waiver, which covers you in case of damages to the car. Make sure you ask about the Excess involved when adding a policy, and if the amount is particularly high, you can get Car Rental Excess Insurance to cover that. Additional insurance worth considering is Roadside Assistance, especially if you are in a foreign country, and Personal Accident Insurance, which covers your personal expenses in the case of an accident. When choosing which policies to add, take into consideration the roads youll be driving on as well as the climate, as rough terrain might require a higher level of insurance coverage.
Car rental insurance in the US
When traveling to the US, each state might have a different law as to which insurance is required and which is not, but overall, the three main types of insurance that you should have in all cases are Third Party Liability Insurance, which is a requirement, Collision Damage Waiver or a Loss Damage Waiver . Note that the latter comprises both CDW and Theft Protection, which means you are covered if the vehicle is stolen and for damages sustained during your rental period as a result of theft.
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When Youre Renting A Vehicle Abroad
Youll want to check with your auto insurance and credit card provider to see if they extend protection to the rental car while renting it outside of the country in which you live. More than likely, your auto insurance will not cover you and, unless you have an excellent travel credit card, neither will your credit card.
Its also important to note that some rental car companies require you to purchase coverage within that country anyway. So if you run into a situation like that, youll have to purchase coverage from the rental company anyway.
Of course, we recommend you check with your auto insurance company and your credit card company before making a purchase.
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How Much Coverage Do I Need
Coverage for rental reimbursement typically lasts a month. When working with your insurance company to pick your coverage and add reimbursement to your policy, estimate how long you’d need reimbursement covered to figure out how much coverage you need. The average time it takes a car to be repaired after an accident is one to two weeks, so that may be sufficient coverage.
Something extra to consider when adding rental reimbursement coverage to your auto policy is that your coverage will typically allow for a basic, economy car from the rental company. If you have a specialty vehicle, like a work truck, you may need to pay more for a comparable car.
This even applies to things like minivans. Six- to eight-seat vehicles are not typically considered economy. If you have several children, discuss your rental reimbursement coverage options with your insurance agent or company. They may be able to offer something at a higher price to get you a bigger vehicle. Or you may be able to use your rental reimbursement for part of the cost.
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Using Your Credit Card For Rental Car Coverage
Youll automatically have this coverage if its included with your credit card no need to call or sign forms. But its usually secondary coverage, meaning your own auto insurance policy will pay out first if its available. NerdWallet assessed .
If youre planning on credit card coverage, call your credit card issuer to confirm the details.
How Much Does Rental Car Reimbursement Coverage Cost
It generally costs between $2 and $15 a month to add rental reimbursement to your auto policy, but final costs are determined by an individual policy, the size of the vehicle and more. This is relatively inexpensive compared with out-of-pocket car rental costs, which average more than $130 per day.
Some quick math shows how advantageous holding a rental reimbursement policy can be in the event you need to rent a car while yours is repaired or replaced. Say you rent a vehicle for a week while your car is repaired: The average cost would be about $910.
If your auto policy’s rental reimbursement coverage costs $5 per month, however, it would take 182 monthsover 15 yearsto reach your out-of-pocket costs. If you use the policy even once during that time frame, your rental reimbursement coverage could be well worth it.
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See How Much You Can Save
To learn more about how you can save on car insurance. Get in touch with the independent agents at LoPriore today. Our experienced insurance agents are available 24/7 to answer your questions, provide information about our auto insurance policies, or provide you with an instant quote.
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What Is Rental Car Reimbursement Coverage
Rental car reimbursement coverage is a feature you can add to your auto insurance policy to help pay for a rental car if your vehicle is damaged or stolen. Policies will specify qualifying events under which you are entitled to rental reimbursement, but they do not typically include things like regular maintenance.
This is different from rental car insurance, which is coverage that applies to a car you rent. That may be covered under your regular auto policy, a rental car company’s policy or even your credit card’s perks. Rental car reimbursement coverage, on the other hand, must be added to your regular policy and is only about the cost of a rental vehicle.
Some rental car reimbursement policies may fall under a broader category of transportation expenses. Depending on the policy, these may cover:
- A set amount toward a rental car for a set amount of days
- Rides with Uber, Lyft or other services
A typical rental reimbursement policy covers around $30 to $40 per day for up to 30 days. Or it may be set up to cover a set amount, like $25 per day up to a total amount of $800. But amounts will vary depending on your individual policy and company.
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What Should I Do Before Renting A Car
Step 1: Contact your car insurance company to make sure you understand your policy and what is covered when you rent a car.
Step 2: Contact your to find out what coverage it provides.
Step 3: Finally, bring your car insurance declaration page so you can present it to the rental company if any questions come up when you pick up your car.
Does My Rental Car Insurance Cover International Travel
The answer to this question depends on the policy you decide to use: your existing auto policy, an independent coverage plan or your credit card benefits.
As mentioned above, your existing policy will specify whether or not your international rental is covered. If you aren’t sure, reach out to your provider for specifics. An independent coverage plan establishes your rental destination upfront, so your quote will automatically include international coverage.
Your credit card’s rental car benefits are a little bit more complex. These perks usually apply to international rentals as well as domestic rentals, with some exceptions. For example, Visa offers many credit cards that include domestic and international rental car insurance as part of your cardholder benefits. But the fine print in Visa’s terms of services states that the issuer does not pay for theft or damage from rental reservations made in Israel, Jamaica, the Republic of Ireland or Northern Ireland.
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The Other Insurance Company Wont Pay For A Rental Car On My Liability Claim Dont They Have To
Not in all situations. If you have no other vehicle available, the insurer should cover the cost of a rental as part of your damages from the accident at least until they determine the loss on your car. No insurance statutes exist on this issue. More information on this can be found at .
If you purchase rental car insurance, make sure you have collision and loss damage waiver coverage. These policies will help protect the rental companys assets and save you the trouble of filing a claim. However, you must remember that these plans will not cover the expenses of stolen property and liability. However, you can purchase additional coverage if necessary. You should also contact the rental company to see if they offer additional coverage.
Boat Insurance is the same way. In my opinion, to protect your assets, you should get additional coverage.
You should also consider whether or not to purchase a loss damage waiver if you are renting a car for business purposes. By buying a loss damage waiver, you waive your responsibility to pay for damages to your rental vehicle due to accident, environmental damage, or theft. While the collision damage waiver covers collision damage, it does not cover theft. Loss damage waiver is similar to collision and comprehensive policies for rental cars, but most likely does not require a deductible.
Should I Get Rental Car Insurance for Business? Conclusion
What Kind Of Coverage Do I Need In Mexico
The only type of coverage you’re legally required to have in Mexico is liability, and you’ll need to get it through a specialized insurer. Progressive Mexico Auto Insurance by MexPro can help you get the coverage you need. Consider the Mexico equivalent of these additional auto coverages when buying car insurance for your Mexico trip:
- Roadside assistance
Some plans offer the option of repairing your vehicle in the United States if it’s damaged in Mexico. This means the policy will cover additional labor costs associated with having your car repaired in the U.S.
Research how much liability coverage is required in each of the Mexican states you plan to drive in. If you’ll be traversing multiple states and one has a higher requirement for coverage limits, you’ll need to get at least that amount.
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Rent With Peace Of Mind
Wherever you plan to rent your car, you can travel freely knowing that your auto insurance will have you and your rental car covered.
While rented vehicles are covered by your policy, there are still some areas drivers are surprised to learn are not protected through their auto policy. Take a look at our guide to everything you should know that doesnt receive coverage on your auto policy: What is Not Covered by Car Insurance?
Do I Need Rental Car Insurance If I Have Health Insurance
Not if you are traveling in country. In the United States, most health insurance policies will cover your injuries in a car accident without question. Even policies with strict network requirements should cover emergency room visits, or medically necessary hospital stays at the in-network rate. This means if you need life-saving care, you wont have to bankrupt yourself to get it .
This might change if youre out of the country, though. Thats why its important to closely read the terms of your health insurance to see what is and what isnt covered. If your coverage is strict about receiving out-of-network care or limits responsibility for bills accrued outside the country, adding on some additional personal accident insurance cant hurt.
While health insurance may provide medical protection for you during an accident, it doesnt cover any damage to your vehicle, damage to other vehicles, or other peoples medical bills. So you may need to add on this coverage depending on the other factors weve been discussing.
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