Auto Insurance and Rental Cars: What You Need to Know

You may need a rental car while you’re on vacation or to use while your car is in the shop.  Renting a car is a fairly easy process, but you may not be sure if your car insurance policy would cover a rental.  Most of them do, but be sure to review your policy before you get to the rental counter.

Be aware that if someone will be driving your car while you’re away, such as an adult child, in the event that both of you are in accidents, your policy will cover your car.  You can also add a rental reimbursement to your existing policy which will prevent the rental company from suing you for loss of use and your insurance carrier will fix the rental. You can add the rental reimbursement for the amount of time you’ll be renting the car and remove it when you get back.

There are also rental insurance policies available, but be advised that most cost an additional $15-25 per day besides the expense of renting the car itself.  This is a good idea if the following applies to you:

·         Your existing policy doesn’t have comprehensive and collision coverage. Maybe you opted out when you purchased your policy. If that’s the case, you may want to purchase at least some additional coverage, as the consequences for damaging a rental can be severe.

·         You don’t have a car.  Many people who live in major cities find that owning a car is more of a nuisance than a benefit and rely on public transportation to get from place to place. Or maybe you are without a car for another reason. If you plan to rent a car on your next trip out of town, then you must buy the rental insurance.

·         You’re relying on your credit card. Some credit card companies offer a limited amount of coverage; review your documents to see just what’s included. Some may not cover third party liability claims or only offer secondary coverage rather than primary.

·         You’re traveling abroad. Most policies don’t cover you outside of the United States (or Canada in some instances), so you may want to have at least some coverage.

Do you usually purchase rental car insurance? What has been your experience? Please let us know in the comments below!