If you are going on vacation or getting your car serviced, you will definitely need to rent a car. However, many consumers do not realize that their car insurance policy does not cover the default rental. You will need car rental insurance to get the necessary coverage.
Car rental insurance protects drivers from financial liability while driving the rental vehicle for a limited time. Although your car rental company provides this coverage, you may already be covered by your existing insurance plans or credit card.
Various Insurance Companies May Also Provide Equivalent Coverage.
Not all auto insurance policies are the same, just like typical auto insurance. You may not know what to look for if you have not purchased car rental insurance before. In this post, we'll cover the different forms of car rental insurance and help you figure out which one is best for you.
What are The Types of Car Rental Insurance?
Rental car insurance is similar to regular car insurance. Depending on your demands, you can choose the type of coverage and the degree of coverage you want. On the other hand, car rental insurance is different from vehicle insurance.
You should be aware of your options before purchasing car rental insurance. Here are the most common types of car rental insurance:
Loss and Damage Waiver (LDW): This is a waiver, not a policy, known as a Collision Damage Waiver (CDW). It states that the rental company will not prosecute you if the rental car is damaged or stolen. However, if you have a comprehensive car and collision insurance, it may be covered under your policy.
Additional Liability Insurance: This insurance covers any damage to the vehicles or property of others. Even if you drive a rental car, your liability insurance may cover it.
Personal Accident Insurance: If you and a passenger are injured in an accident, Personal Accident Protection pays for your medical bills. You may already be insured if your current insurance includes personal injury protection or medical payment coverage.
Personal Baggage Cover: This insurance covers any personal belongings stolen from your rental car. A homeowner's or renter's insurance policy may provide equivalent coverage in this scenario.
While car rental insurance comes in many forms, it does not cover everything. You wouldn't use this type of policy, for example, to collect car rental expense payments while repairing your regular car as part of a claim. In this case, you'll use car rental reimbursement coverage, which is another option that is provided in most standard auto insurance policies.
When should you get car rental insurance?
It's not always easy to know when you'll need car rental insurance. You may be tempted to avoid renting a car if you only need it for a few days. Some people's auto insurance policies cover rental cars automatically. So when is it necessary to have a separate car rental insurance policy?
If you don't have car insurance, at the very least, you should get an exemption from liability and damages for a rental car. Since auto insurance for non-owners only covers liability, you must add damage protection to your coverage. It is illegal to drive without car insurance, and you may face significant legal and financial consequences.
It's also a good idea not to rely on your credit card company's rental car insurance, as it is often inadequate coverage in the event of an accident.
Buy an LDW if your auto insurance policy does not provide comprehensive collision coverage. If your vehicle is in an accident or something else happens to your vehicle that causes damage, your coverage will not cover repairs. Physical damage is covered by collision and comprehensive vehicle insurance, which extends to a rental vehicle. State laws vary, so check with your insurance provider.
Remember that liability coverage is included in all auto insurance policies and protects you if you cause an accident and are sued.
The type of coverage you already have or don't have will determine whether you should get rental car insurance. If you have liability coverage, for example, it will accompany you when you rent a car. If you injure someone or injure their property, liability protects you from filing a lawsuit.
If you are using your vehicle on a business trip, there may be some restrictions on your auto insurance coverage.
Another factor to consider is whether you are renting a car for business or personal travel. If this is the case, your current personal insurance policy may not cover your vehicle. It is recommended to purchase car rental insurance if you are not sure. You'll be glad you did because even minor damage can be expensive to repair.
Car Rental Insurance Cost
You will have to pay a deductible if you used your car insurance to protect your rental car and were involved in an accident. However, if you take out car rental insurance and are involved in a collision, you will not be required to pay a deductible.
There are several factors that determine the price of car rental insurance. For starters, it depends on which insurance company you get coverage from. It also depends on the condition, the type of car you rent and the distance you will travel. Adding additional coverage to your policy will increase your premiums.
How to Get Car Rental Insurance for Yourself
Many credit card providers include car rental insurance as part of their customer benefits. On the other hand, your credit card company's car rental insurance is usually secondary.
This means that if you have an accident or your car is stolen, your insurance company will be billed first. If so, the claim will be subject to your deductible.
Although it is uncommon, some credit card issuers offer leading rental car insurance. You will not have to pay a deductible because basic insurance is separate from personal car insurance.
You can contact your credit card provider to see if they offer rental car insurance, and if so, what type of coverage they offer.
Major credit card issuers such as Visa, MasterCard, and American Express offer car rental insurance to their cardholders. To use coverage, you generally must pay for the rental car with your credit card and rent the car in your name. Most major auto insurance companies offer rental car insurance coverage, which makes it relatively easy to obtain.
State Farm, Allstate, Geico, and Farmers include rental car insurance coverage in their standard auto insurance policy. If you are insured, there will be no additional fees beyond what you currently pay for your monthly premium.
As described earlier, your auto insurance policy may include coverage similar to loss and damage waiver, additional liability protection, or personal accident protection. However, not all insurance policies are created equal, and as a result, not all insurance policies cover rental cars. It usually comes with comprehensive crash coverage and additional protection with greater coverage.
If you are not sure if you are covered, the best thing to do is to read your auto insurance policy or ask your insurance representative directly. Review your auto insurance coverage or contact your insurance company about how much rental car insurance you may need before your next trip.