Does My Car Insurance Cover Rental Cars?

Does My Auto Insurance Policy Cover Rental Cars?

If you need to rent a car after a car accident, you may be wondering, “Does my car insurance cover rental cars?” It’s essential to know about car insurance provisions. Otherwise, you may end up paying for double coverage. Even though auto insurance moves with the car in most cases, when it comes to rental cars, the policy moves with the driver.

Most often than not, personal auto insurance can apply to rental cars. But sometimes it depends on the terms of the policy. Each auto insurance company may have slightly different terms. So, it’s best to get clarification from your insurance provider to avoid paying for double insurance. Here are a few things you need to know about rental car coverage.

Do Car Renters Require Insurance?

Car renters generally require insurance when renting a car. You can use your personal auto insurance if you have it. But if not, the rental car company will offer you insurance options, which include liability insurance and a loss damage waiver. In addition, you can buy personal accident insurance and personal effects coverage to pay for valuable items stolen from the rental car.

The liability coverage is compulsory, but the others may be optional. However, you may still consider getting the additional coverage if you can’t afford to pay for car damages in cash. These coverages will shift the liability to the car rental company. If you get into an accident and damage the vehicle, you’ll be off the hook. This means you’re not buying insurance in the real sense but waiving liability.

If you use your credit card to pay for the rental car, the company can use it as a security deposit. Most credit card companies provide rental car insurance as a perk. It can protect you if there’s any damage to pay for the rental car after an accident. So, check with your credit card company to see if it offers this service.

Under Which Circumstances Does My Car Insurance Cover Rental Cars?

Each insurance company may have different terms. But some of these terms apply across the board. Generally, your liability, comprehensive, and collision insurance will apply to the rental vehicle to the same limits as your car. So, if you rent a more expensive car than your own, the insurance company won’t pay for the excess value in the event of a total loss.

Your car insurance doesn’t cover rental cars in the following situations:

• When you use the rental car for commercial purposes: If you are renting a car for business purposes, such as using it as a taxi, to meet up with clients, or deliver goods, your insurance policy won’t cover the rental car. In such cases, you may need to purchase additional insurance from the rental car company.
• Someone not listed on your policy drives the car: your car insurance only recognizes drivers listed on your car insurance policy. If anyone else drives the rental car and gets into an accident, your car insurance won’t cover the damages.
• You drive the rental car outside the coverage area: Some car insurance policies only cover rental vehicles within a specific geographic region. If you plan to rent a car outside this area, your car insurance won’t provide coverage.
• The rental car is involved in illegal activities: If the rental car is used for illegal activities such as smuggling, your car insurance policy won’t cover any damages or losses resulting from these activities.
• The damage to the rental car is due to negligence: If you cause an accident due to negligence, such as driving under the influence of drugs or alcohol, your car insurance policy won’t cover the damages.

When Should I Buy Insurance From A Car Rental Company?

Buying insurance from car renters is an extra expense. So, before rushing to buy it, first, consider if you have the following options:

• Personal car insurance policy
• Travel Insurance
• Health insurance
• Credit card with car rental insurance option
• Umbrella Insurance
• Non-owner car insurance

If you have none of the above options, you can buy insurance from the car rental company. You can also buy from them if:

• You don’t want your insurance rates to increase if you get into an accident after using personal auto insurance
• Your personal auto insurance doesn’t cover rental cars
• You don’t want to risk having to pay for damages out of pocket
• You’re traveling in a foreign country

What happens if you get into an accident without car rental insurance? You’ll pay for any damages to the rental car company and any injuries or property damage to third parties. If the car is totaled, you’ll have to pay its full cost. That can be a significant expense that can lead to financial hardship.

Also, the car rental company may charge you:

• Administrative fees incurred to file a claim
• Diminished car value to account for the loss of market value after repairing the car
• Loss of use charges to make up for the lost profit when the car wasn’t in use
• Towing fee if the vehicle is not drivable after an accident

The Bottom Line

When it comes to renting cars, auto insurance policies follow the driver. That means your personal car insurance will follow you to the rented car. But since insurance companies differ, confirm with your auto insurance provider whether they cover rented cars and ask them about the limits.

If you have more questions about car insurance in Clearwater, don’t hesitate to reach out to Coleman Insurance Agency. Our customers have trusted us for decades to help them identify the best car and homeowners insurance in Clearwater.

Contact us now and let us help you find the insurance coverage that fits your unique needs and budget.