Rental car insurance is coverage specifically for rented vehicles. It provides financial protection in the case of accidents, theft, or damage – and you might already have it. To avoid purchasing additional coverage you may not need, you’ll want to check if you’re covered for a rental car prior to picking it up, or even better, prior to booking the car. But how do you know if you’re covered? And should you consider purchasing insurance via the rental agency?
When renting a car, pickup or van in Canada or USA, your policy will pay for damage to a rental car if you carry comprehensive and collision on at least one of your vehicles. You would still have to pay your deductibles. Your credit card may also cover damage to the rental car. But, we still recommend that you purchase the Optional Collision or Loss Damage Waiver. The reason we suggest that you purchase this coverage is that your credit card or insurance policy may pay to repair the damage, but rental companies have situations in their contract that may not be covered by your insurance company. For example, after one person’s auto policy paid $6000 to repair a damaged rental car, the rental car company sued them for an additional $9,000 to cover the reduction in the car’s value. Rental companies can also charge you for loss of rental income while the car is being repaired. Your policy doesn’t cover this, though your credit card might. Again, if you don’t carry Comprehensive and Collision coverage on at least one of your vehicles, you won’t have any coverage for damaging a rented vehicle.
You may also want to purchase the optional Liability protection, especially if you don’t want to turn in a claim on your policy.
Rental car companies also sell “Personal Accident” coverage for medical expenses and death caused by a car accident. If you have adequate life and medical coverage, this may not be needed, but of course, we leave this decision up to you. Another option is “Personal Effects” coverage that pays for loss to your luggage and personal property by a car accident. It is very limited and duplicates coverage provided by Homeowners or Renters Insurance Policy. Again, a personal decision that the client has to decide due to deductibles and surcharges for turning in claims.
Some additional information: First, if you are renting a truck larger than a pickup, your policy doesn’t pay for any damage to the truck and may not pay for liability coverage either. We suggest that you buy the extra coverage they offer. You may also want to buy their “Cargo” coverage to provide to protect you against damage to the things you are hauling.
Finally, if you will be renting a vehicle for business reasons, check with your employer to see if they will protect you. If not, we will need to know specifically what you will be renting since some vehicles, especially pickups and vans, are not covered when rented for business use.
Will my credit card cover me?
There are many credit cards on the market that offer benefits which may include some level of protection for a rental car. Because each card (and card company) offers different coverages, it’s important to first review your cardholder agreement or reach out to your credit card company to ensure you have enough coverage.
Keep in mind that with most credit card companies, there are certain conditions that must be met for coverage to be active. For example, in order for coverage to apply, some credit card companies may require you to charge the cost of the rental vehicle to your credit card. And, with your credit card’s coverage, although most vehicles are covered, there are some exceptions. Make sure you check your credit card policy for further details or reach out to your credit card company for further information.
Do I need rental car insurance?
Yes, it’s highly recommended to have insurance for a rental car. Having the right coverage in place may prevent you from paying out of pocket to cover the cost of loss or damage to your rental vehicle. However, you don’t necessarily need to take the insurance offered by the rental car company to have coverage. In fact, rental car insurance may already be included in your existing insurance policy. Many credit cards also offer some level of insurance protection for rental vehicles. Of course, we still suggest taking the time to review each of your rental car insurance options to ensure you have the coverage you need. Coverage from the rental car company, coverage provided as an optional add-on to your insurance, and coverage available as credit card benefit may not overlap and could include different risks and policy limits.
