Does My Auto Insurance Cover Rental Cars?

We have a tendency not to check this things and turn up on the counter and think about it. If you have full coverage automobile insurance how would it cover rental cars? This is a frequently asked question. Buying it from the hire company is so expensive that you may want to make alternative arrangements beforehand. Sometimes it can double the costs but you may be able to avoid it if you have a policy that can extend to it. Let’s have a look at a typical situation and how would it change when the circumstances change.

A standard car insurance policy with full coverage will insure rental automobiles the same way it does your own car. If you have an accident you will need to pay the usual deductibles. Buying it at a hire counter is not economical to say the least. Nonetheless, check with the provider especially when the situation is a bit different. A quick phone call will clear things up and give you confidence.

It is worth mentioning that your typical Collision and Comprehensive pays for repairs or total loss. However, Hire companies sell something called;

Loss/Collision Damage Waiver, which seems to work just like Collision and Comprehensive but it is not even an insurance product. It is just an agreement to transfer all the financial responsibility to them in case it is damaged in an accident, get stolen or sustains weather damages. The only sticking point is that this Waiver includes loss of use as well. Remember the vehicle will be out of commission while it is being repaired and they will lose money on it. So, see if they have anything like loss-of-use waiver you can buy on top of own full policy to deal with this issue just mentioned. Otherwise, you might just take a chance on that, rather than doubling the existing protection.

It is always best to make sure by giving the agent a call and checking if it extends and is there any conditions to it. Usually most policies have the above standard provision. Here are a few points to keep in mind though.

  1. Some companies will not consider commercial rental vehicles like Uhaul trucks or vans at all.
  2. It will only include personal use and not business trips.
  3. Most of them probably have restrictions on what type of cars you can hire. For example, would they include a sports car you are taking for a spin in a holiday? The same applies to a luxury car that is 10 times more expensive than your own. If you are looking to rent something a bit different or exotic you should call them first and check if they will include this vehicle. You need to be sensible and reasonable about it.
  4. It will not extend to anything abroad (maybe except Canada, which you may need to check before going ahead).

And, if you have Liability Only vehicle insurance you may be able to use it and buy the Loss/Collision Damage Waiver from the rental company, rather than the whole coverage. Many people buy non-owner auto insurance just for this purpose. They allow policyholders drive someone else’s vehicle with confidence that they have a back up plan just in case something goes wrong.

By the way, some credit cards may provide some sort of rental vehicle provision as well if you pay with them. Usually, they are secondary to anything else you might have and not all of them offer this. But they may be handy if you don’t have any protection and they may pay the deductible. Simply, they are there as a back up and pay some of the things that others don’t.