What is rental car insurance?

What is rental car insurance?

If you drive a rental car then you need to purchase a rental car insurance policy to drive legally in the state. It is essential to purchase a rental car insurance policy in every state for the drivers who drive a rental car. It is against the law to drive a rental car without a rental car insurance policy. You can purchase rental car insurance from your rental car company. If you have a personal car insurance policy then before purchasing the rental car insurance you need to review your personal car insurance policy. If your personal car insurance policy covers your rental car then you have no need to buy a separate rental car insurance policy, it can just raise your expenses. 

Does your personal car insurance policy cover your rental car?

If your personal car insurance includes liability coverage, collision coverage, or comprehensive coverage then it covers your rental car when you drive it for personal use. Coverage limits of your personal car insurance policy also cover the rental car then you do not have a need to purchase the additional rental car insurance policy. 

Liability coverage

If you had an accident in your personal car or rental car then liability coverage helps to cover the expenses of injuries to others and property damage of others when you are at fault in an accident.

Comprehensive coverage

If you have comprehensive coverage in your car insurance policy, you can cover the cost of damages to your personal car or rental car due to theft, vandalism, natural disasters, etc. 

Collision coverage

If you have collision coverage in your car insurance policy, you can cover the repair cost of the damages to your personal car or rental car due to collision with vehicles, animals, trees, etc.

More about rental car insurance: Do I need to buy rental car insurance?

Advantages of using your personal car insurance policy to cover rental cars:

It saves you money

If you use your personal car insurance policy to cover your rental car then you can save money.  Rental car insurance policy is more expensive than a personal car insurance policy.

Less paperwork

Using your personal car insurance policy to cover rental reduces paperwork. It also saves time to file out rental car insurance policies.

When do you need to purchase a rental car insurance policy?

You need to purchase a rental car insurance policy if you do not have a personal car insurance policy. You need to purchase at least minimum insurance coverage from your car rental company. It is necessary to purchase a rental car insurance policy otherwise the state can cancel your driver’s license if you are caught driving a rental car without a car insurance policy. You need to purchase an additional rental car insurance policy in the following cases:

  1. If you have only a commercial car insurance policy then you need to purchase a rental car insurance policy.
  2. If your personal car insurance policy does not include comprehensive coverage and collision coverage then it is required to purchase an additional rental car insurance policy.
  3. When you use your rental car for business purposes then your personal car insurance policy does not cover your rental car. In this situation, you need to buy a separate rental car insurance policy.  
  4. If you are driving across the country then your car insurance policy would not cover your rental car.
  5. If your personal car insurance policy has high deductibles then it is a good option to purchase a rental car insurance policy.

Does your car card have rental car insurance coverage?

If you pay for a rental car by using your rental car some credit card companies offer a rental car insurance policy. You must contact your credit card issuer to know that your credit card includes rental car insurance or not. You must inform your credit card issuer about the coverage limits and details of the rental car insurance policy offered by them.  If your card has a rental car insurance policy then you have no need to spend extra money on the separate rental car insurance policy

Rental car companies offer different rental car insurance options

  1. Liability coverage
  2. Loss damage waiver
  3. Personal effects coverage
  4. Personal accident coverage

Check your travel insurance before purchasing rental car insurance

Some insurance companies offer rental car insurance with a travel insurance policy. Before purchasing an additional rental car insurance coverage you need to check your travel car insurance policy. You can ask your travel insurance agent if your travel insurance includes rental car insurance or not. 

Check your health insurance policy before purchasing rental car insurance

Some health insurance policies cover the medical expenses of you and your passengers if you had an accident in a rental car. If you have proper health insurance and then you have no need to purchase personal accident coverage in your rental car insurance policy.

Check your homeowners or renters insurance policy before purchasing rental car insurance policy

If your homeowner policy covers the damages due to theft of personal items from your rental car then you can exclude personal effects coverage from your rental insurance policy.

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