When you’re renting a car, the last thing you want to worry about is whether or not you’re covered in the event of an accident. Many people assume that their standard car insurance policy will cover them when driving a rental car, but this is often not the case. In fact, most standard car insurance policies don’t offer any coverage for rental cars. This is why it’s important to understand what rental car liability insurance is and whether or not you need it. This article will discuss everything you need to know about rental car liability insurance.
What Is Rental Car Insurance?
Rental car insurance is an insurance policy that covers the damage or loss of a rental car. It’s also known as “car rental insurance” or “collision damage waiver” (CDW). Rental car insurance is separate from your regular auto insurance policy.
Understanding the difference between the two is important to ensure you’re covered. Your regular auto insurance policy will most likely not cover the damage or loss of a rental car. You would need to purchase rental car insurance to be covered. Most rental car companies require that the renter has this type of insurance before they allow him or her to rent a car.
There are a few different ways to get rental car liability insurance:
- Purchase a policy from the rental car company.
- Buy a standalone policy from an insurance company.
- Upgrade your existing auto insurance policy to include coverage for rental cars.
- Get rental car coverage through your credit card company.
Whichever way you choose, make sure you’re familiar with the terms and conditions of the policy before you agree to it.
Types of Rental Car Insurance
When renting a car, it’s important to know what kind of insurance coverage you need. Rental car companies offer several different types of insurance. Here’s a quick rundown of the most common types of rental car insurance:
- Liability insurance: This type of policy covers damage you cause to other people or property while driving the rental car. It’s required in most states and usually included in the base rate for the rental car. Nevertheless, your personal liability insurance might already cover you when driving a rental vehicle.
- Collision damage waiver (CDW): Sometimes referred to as a “loss damage waiver,” this type of insurance covers damage to the rental car caused by an accident, regardless of who is at fault. However, this may be included in your policy if you have comprehensive and collision coverage on your regular auto insurance policy.
- Personal accident insurance (PAI): Rental car companies typically offer this coverage as an add-on to their standard rental agreements. PAI can be an important safeguard for travelers, as it covers medical expenses for you and your passengers if you’re involved in an accident while driving the rental car. Again, you may not need PAI if you have personal injury protection (PIP) or medical payments coverage on your regular auto insurance policy.
- Personal effects coverage (PEC): This type of insurance covers loss or damage to your personal belongings while they’re in the rental car. Car rental companies might not include it in the base rate, but they may offer it as an add-on. Your renters or homeowners insurance policy may already cover your personal belongings, so check with your insurer before purchasing PEC from the rental car company.
How Much Does Rental Car Liability Insurance Cost, and Is It Worth It?
The average rental car liability insurance cost is between $9 and $19 per day. However, the price can vary depending on the type of car you rent, the length of your rental, and the state you live in. In some states, the cost of rental car liability insurance is included in the rental price. In other states, it’s not.
Whether or not rental car liability insurance is worth it depends on several factors, including the value of your car and the amount of coverage you have. If you’re renting an expensive vehicle, or if you don’t have comprehensive or collision coverage on your personal car, then rental car liability insurance may be worth the cost. However, if you have a low-value car and comprehensive vehicle coverage, you might not need to purchase rental car liability insurance.
Which Insurance Providers Offer Rental Car Insurance?
Many insurance providers offer rental car insurance as an add-on to their auto insurance policies. Some of the more popular companies include Allstate, GEICO, State Farm, and Progressive.
Some credit card companies also offer rental car insurance as a benefit to cardholders. According to Forbes, some credit card companies may exclude coverage for certain types of rental cars, like:
- Motorhomes
- Luxury vehicles
- Motorcycles
- Trucks
Check your benefits guide, or contact your credit card company to see what is and isn’t covered before you rent.
When considering which insurance provider to use for your rental car, it’s important to compare the coverage and costs of each option. You may also want to check with your personal auto insurance policy to see if it provides any coverage for rental cars.
To find out if your insurance provider offers rental car insurance, contact them directly or check their website. If they do offer it, be sure to get quotes from multiple providers. By taking the time to do your research, you can be sure to choose the right rental car insurance for your needs.
Before renting a vehicle, take some time to find out whether you have coverage through your personal auto insurance, credit card company, health insurance, or homeowners insurance. By understanding your coverage, you can make an informed decision about whether or not to purchase rental car liability insurance. Be sure to read the fine print of any policy you buy to understand the terms and conditions. Familiarize yourself with what is and isn’t covered by the policy. And finally, compare rates from multiple providers to ensure you’re getting the best deal.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
