We’ve all driven a rental car during our adult lives on many different occasions. Maybe you were on vacation and needed a way to get around or needed a rental when your car was in the shop for repairs. This article discusses what coverage rental car company insurance provides and when it makes sense to get it. Are you renting a car and have specific questions about rental car insurance, or wondering if your existing policy covers rental cars? Let our team of agents in Ohio, Indiana, West Virginia, and Maryland help you understand what your existing policy covers.
How much does rental car insurance cost?
Rental car insurance, like auto insurance, varies by state with how much coverage you can opt for. Additionally, rental car insurance can vary based on the car rental company you are using. Here is an average cost range of the different components of rental car insurance:
- Supplemental Liability Insurance: Liability insurance generally covers damage to other people’s property (like a car) and medical expenses for injury to other people in an accident for which you are legally responsible. In the United States, all states require a minimum amount of liability auto insurance policy. You may have liability insurance through personal auto insurance. SLI costs on average $8 to $12 per day.
- Loss Damage Waiver: The loss damage waiver or collision damage waiver provided by a rental company means that if your rental car is damaged or stolen, you don’t have to pay for repairs or replacement. However, these exemptions generally include deductibles. This can cost from $20 to $30 per day on average.
- Personal Accident Insurance: Although liability insurance covers other people’s property losses and accidental injuries, personal accident insurance covers medical, ambulance, and death benefits for you (the rental car driver) and your passengers. This costs an average of $3 per day.
- Personal Effects Coverage: Personal property insurance covers the theft of property from a rental car up to a set limit in reimbursement. This costs $2 per day on average.
When should I get rental car insurance?
You might be wondering whether or not it’s necessary to even get rental car insurance. There are certainly times when purchasing it might be redundant. It depends on what type of existing coverage you have.
If you have a personal car insurance policy, it includes liability insurance and any additional insurance you may have chosen such as comprehensive insurance or collision insurance. As long as you drive the rental car for personal use, the insurance coverage can be extended to your rental car. The coverage limits and deductibles on your personal insurance policy also apply to the use of rental cars. If you cause an accident to your vehicle (or your rental vehicle):
- Liability Insurance: Liability insurance can help pay for the medical expenses of others or the loss of others’ property and cover your vehicle (or rental car) if it is damaged due to covered risks such as theft, wind, fire, or natural disasters.
- Comprehensive: Your comprehensive insurance deductible will apply. If your vehicle (or rental car) is damaged when it collides with another vehicle or object (such as fences or trees).
- Collision: Collision insurance can help pay for repairs. Your collision insurance deductible will apply when you get into an accident with another vehicle or you hit a tree.
You can learn more about full-coverage insurance here.
How to get a rental car after an accident
Let’s say you get in an accident and your car is in the shop. You might need a rental car to get around. You may have already opted for rental car reimbursement with your insurance provider and you may be eligible for reimbursement of the rental car costs. (If you don’t have rental car insurance, you can give our team of agents a call at 1-800-945-1410 to discuss what options are available to add rental car reimbursement to your policy.) Here’s a step-by-step process to follow in the event that you’re in an accident and you’re trying to get a rental car:
- Call Your Insurance Provider: In many cases, calling your insurance provider will be the first step to file a claim. When you do that, make sure to ask specifically about rental car reimbursement. In most situations, if your car is considered safe to drive and you opted into rental car reimbursement, your reimbursement period begins on the day you drop your car off for a repair. If your car is not considered safe to drive, then your rental car reimbursement period still begins on the day it is dropped off at the shop for repairs (in some cases the same day). The best thing to do is to call your insurance provider for more information.
- Determine Your Rental Car Reimbursement Period: Many times, insurers typically reimburse you for a set amount per day for a rental car, up to a maximum reimbursement limit. For example, your car insurer might reimburse you $25/day for up to 30 days or ($750 maximum). In this example, insurance will pay up until that 30 day period lapses, while your car is in the shop.
- Determine Which Rental Car Company to Use: Many times, insurance companies will have preferred rental car companies they work with and typically have payment agreements with these companies. It’s best to use their preferred rental car company to ensure the transactions are seamless and to minimize any likelihood of your rental car reimbursement claim being rejected.
Should I buy insurance from the car rental company?
If you do not currently have insurance, you at least need to purchase liability insurance from the rental company before you hit the road. This is because the law requires liability insurance for all drivers in most states. You’ll want to consider adding rental car insurance if you don’t have the following types of auto insurance:
- You don’t have comprehensive or collision coverage.
- You have a higher deductible and won’t want to file a claim through your regular insurance provider.
- You’re only currently insured under a commercial auto policy.
If you’re driving internationally, with the exception of Canada, you’ll likely need to opt to purchase car insurance from the rental car company you choose as most insurers do not cover international driving. You should give your insurance provider a call if you have any questions about this.
What happens if I get into an accident without car rental insurance?
Most auto insurance policies provide insurance when the policyholder drives a rental car. You should read the details of your policy carefully to see if it covers car rentals and, if so, what kind of protection is provided. Call your car insurance agent to make sure you understand the details of your current policy before declining the coverage provided by the car rental company. Our team of agents in Ohio, Indiana, West Virginia, and Maryland are more than happy to assist you in determining if your current insurance is sufficient and if you’ll need additional coverage for your rental car.
Disclaimer: This blog post is meant for general informational purposes only and may not reflect your specific policy.
About the Author: Alekha is an expert in the insurance space and has been with the Malhotra & Assoc. Insurance team since its inception. Alekha works to provide expertly written and researched content for the Maholtra & Assoc. Insurance agency.