Rental Car Insurance: Is it Necessary to Purchase?

By Jessica Merkel

Renting a car comes with many questions about insurance coverage. When is it a good idea to have rental car insurance? Does my regular auto insurance policy cover rentals? What are my options?

To answer these questions, the first thing to do is reach out to your auto insurance agent. If you have an auto insurance policy already, your agent can help you understand the terms of your policy and if it extends to car rentals. They can also give you information about your options. 

It is typical for personal auto insurance to apply to rental cars when the car is used for personal or non-business purposes. If you need to rent a vehicle for commercial or business purposes, reach out to your agent to discuss the details of rental insurance. 

If you do not currently have a personal policy, you should at least buy liability insurance at the time of renting. Rental coverage at the time of renting a car usually has the following options:

  • Loss-damage/collision damage waiver
  • Liability coverage
  • Personal accident insurance
  • Personal effects coverage

Your personal auto insurance likely covers events of injury or damage caused by you while driving the rental car, which would be included in the liability coverage and personal accident options above. However, the loss-damage/collision damage and personal effects are less likely to be a part of your personal coverage. 

If your personal policy already covers liability and personal accidents, it is a good idea to at least sign the loss-damage waiver so that you have the most protection available. The loss-damage waiver protects you from financial responsibility if the rental car is stolen, damaged, towed or if it needs any repairs after use. This coverage is usually the most expensive out of all of the at-the-counter options, ranging from about $10-20 per day, but it provides the best protection for the driver. 

The best advice to help you avoid wasting money on add-on insurance at the time of renting is to check with your auto or home/renters insurance agent before traveling. Find out everything you can about your existing policies for potential rental coverage.

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