What you need to know when renting a car
Our agents are frequently asked how insurance applies to rental cars. Most often we are asked, “Do I need to buy the rental car insurance?”. The only person who can answer that question is you. It depends on the level of risk you are comfortable with. In order to help you make an informed decision, here are a few things you should look at.
Standard Personal Auto Insurance Policy
Standard personal auto insurance policies extend coverage to a rental car. Look for comprehensive and collision coverage on your personal auto policy. If you have these physical damage coverage options on your vehicle it will extend to a rental car. The same comprehensive and collision coverage deductibles will also apply. If not, the rental car company will typically require you purchase the Loss Damage Waiver.
Standard personal auto insurance policies do not provide coverage for Loss of Use. When a rental car is damaged the rental car owner can require reimbursement for any time the car was out of service. When using your personal auto policy extended coverage for your rental car, these costs will be your responsibility.
Personal Injury Protection coverage always extends to any incident involving a motor vehicle.
Watch for any exclusions on your policy limiting coverage for rental vehicles. When in doubt, check with your agent.
Commercial Auto Insurance Policy
Commercial auto insurance policies do not automatically extend coverage to a rental car. Liability and physical damage coverage can be added to the policy. Look for Hired Auto Liability and Hired Auto Physical Damage on the insurance declaration page to see what your policy provides.
Policies with a symbol 1 indicated for liability include coverage for owned, hired and non-owned vehicles. When the declaration page indicates this option liability will extend to a rental car.
Policies with symbol 8 indicated for liability include coverage for hired vehicles. When the declaration page indicates this option, liability will extend to a rental car.
Medical Payments coverage applies any time injury is sustained by a motor vehicle.
Farm auto insurance policies may include coverage enhancement changing the policy to extend coverage like a personal auto policy. This is not always the case. When in doubt, check with your agent.
Rental Car Company Coverage Options
- Collision Damage Waiver: Provides coverage for the rental car if it is stolen or damaged. The waiver may include a deductible. The waiver typically includes coverage for loss of use fees and loss of value charges.
- Supplemental Liability Insurance: Provides coverage for damage the rental car causes to other people’s property as well as medical costs for injuries. Personal and commercial auto policies can be used to extend liability to a rental vehicle. If you want additional limits of coverage it’s more cost effective to purchase them on your primary auto policy or by adding an umbrella liability policy.
- Personal Accident Insurance: Coverage includes medical bills, ambulance fees and death benefits for you, the rental car driver, and passengers. If you have rejected this coverage on your primary auto policy, this is a way to add coverage for the time you are driving a rental car.
- Personal Effects Coverage: Covers the theft of possessions from your rental car. If you have a homeowners or renters insurance policy, coverage extends to your personal effects in a rental car subject to your deductible.
Ask an Agent
Your licensed insurance agent can help you review your policy and explain how coverage extends to your rental car. If you don’t have a licensed agent, give us a call. We are happy to help!