Does My Auto Insurance Cover My Rental Car?

Whether you are on a business trip or on vacation, you may have heard the question that is normally asked by rental car companies; that is if you want additional insurance for your rental car. You could say yes and buy it out of fear or turn it down, believing that you are covered for rental car purchases. However, the reality is that unless you look up your current auto insurance policy and see if you are covered, you won’t truly know and may lose out on some savings. It’s always a good idea, then, for you to call your insurance agent to get the details about your policy.

Normally, there are two cases in which you are covered by car insurance for a rental car. Both of these ideas have their pros and cons.

Having an auto insurance policy. Some insurance companies extend their coverage to rental cars as well, as long as you are taking a leisure vacation, so be sure to question this to your insurance agent. But know that whatever coverage gaps that you have in your policy will extend to your rental car, too. And if you are traveling for business, you should have your employer pay for the insurance, since your car insurance policy will not apply.

Having auto insurance protection with a credit card company. Some credit card companies can give you protection for automobiles that are rented by their credit cards. While coverage varies by credit card company, the terms and conditions of your policy may change from time-to-time. However, insurance protection usually only covers the physical damages of the car; it usually does not cover personal injuries, liability, or theft of personal belongings.

Types of Additional Auto Insurance Coverage By Rental Services

If you know that having additional coverage fits your situation, then know that there are usually four common insurance options that are given by most automobile rental companies:

Collision Damage Waiver and Loss Damage Waiver (CDW and LDW). Pays out if you lost your rented car due to theft, or if it’s vandalized or damaged from a collision.

Personal Accident Insurance (PAI). Pays out for your medical costs due to a car accident in your car rental.

Supplemental Liability Insurance (SLI). Gives you up to $1 million in extended liability coverage.

Personal Effects Coverage (PEC). Pays out for any personal belongings of yours stolen from your car rental.

Some Things To Keep In Mind With Auto Insurance

Here are some tips to keep in mind as you figure out whether you want to add on additional coverage to your car rental:

Don’t purchase the same coverage twice, if you have an auto insurance policy, unless you have coverage gaps.

Talk to your auto insurance agent before deciding to buy additional auto insurance for your car rental.
Ask the rental car company for a copy of their insurance policies.

Compare company’s price to auto insurance quotes in your area to see which one’s better.

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