Everything You Need To Know About Rental Car Insurance

Nov 14, 2022 By Susan Kelly

If you choose to accept all coverages, the rental car you had been paying $49 per day will suddenly cost you $100. However, how much protection do you get from the coverages that come with the rental automobile, and do you need them? Purchasing a rental car comes with a few benefits. Still, if you already have auto insurance for your vehicle at home, you may not want additional coverage since you already have it.

Car Rental Insurance

The insurance coverage you buy from a rental car agency offers many of the same types of protections as the auto insurance you have for your vehicle, even though the terminology is different. You can purchase this coverage by paying a separate fee to the rental car company. The rental agency will often provide a variety of coverages that includes the following options:

Liability Insurance

The safeguards afforded by liability insurance for rental cars are identical to those accorded by insurance policies purchased for one's vehicle. If you are at blame for an accident, liability coverage will pay to repair the vehicle of the other driver and cover their medical bills (as well as those of their passengers). Most states mandate that motorists have some liability insurance, even if it's only the bare minimum. For instance, the state of California mandates that owners of private passenger vehicles acquire the following minimum levels of insurance coverage: bodily injury coverage of $15,000 to pay for the injuries of one person, bodily injury liability coverage of $30,000 to pay for the injuries of more than one person, and property damage liability coverage of $5,000.

Waiver of Loss and Damages

If you have LDW coverage, you won't be financially responsible for any damage done to or theft of the rental vehicle while you have it. It is also possible that it may contain towing coverage and loss of use coverage, which would compensate you if the car is made unusable during the contract term. LDW coverage, much like the collision coverage on a personal auto insurance policy, has several exclusions; thus, reading and comprehending the policy's small print is essential. For instance, if you cause an accident while under the influence of alcohol or while speeding, your liability coverage for the car may not apply.

Personal Accident Insurance

Regardless of who was at blame for an accident, rental car insurance may assist pay for medical bills incurred by you and your passengers. This is similar to the personal injury protection (PIP) or medical payment coverages included in a personal vehicle insurance policy.

Protection for Your Belongings

If a burglar makes off with your possessions from a rental automobile that you have, personal effects coverage might assist in replacing those items financially.

What Expenses Are Covered by Your Individual Automobile Policy?

If you already have car insurance for a personal vehicle, your policy may also cover you in a rental car. However, before you decide to forego the coverages provided by a rental vehicle business, you should first familiarise yourself with the terms of your auto insurance policy, determine each coverage's limitations, and consider your deductible.

Collision Coverage

You may not need liability coverage for a rental automobile if you already have collision insurance on your vehicle. However, be aware that if you wreck the rental automobile, your insurance company will only pay you the maximum amount specified in your policy. Consider obtaining LDW coverage if you are renting an expensive vehicle with a potential replacement cost that is more than your collision limit. For example, if you are renting a sports car while you are on vacation. Additionally, your collision policy may only cover a rental automobile if used for personal reasons and not for business trips.

Liability Coverage

Even while the liability coverage on your own vehicle could also cover a rental automobile, you still need to have enough coverage to satisfy the legal requirements in the state where you will be driving the rented vehicle. For instance, if you live in California and only carry the legally required minimum liability coverages, you would not satisfy the requirements of the state of Oregon, which mandates higher limits for bodily injury and personal property liability coverages. If you moved to Oregon, you would need additional coverage to satisfy the state's standards.

Comprehensive Coverage

If your vehicle is broken into or stolen, comprehensive insurance may assist replace it. Other types of damage, such as vandalism, are also covered. However, many people cancel their comprehensive insurance coverage after paying off their last vehicle payment. Purchasing LDW coverage is recommended if you do not have comprehensive coverage for your vehicle. This policy relieves you of financial obligation if your rental vehicle is stolen or destroyed.

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