If you are planning a vacation or traveling for business, you may need to rent a car. But there’s one major question: what happens if you get into an accident? Will you be covered?
You may wonder: does my insurance cover rental cars? Maybe, maybe not. It depends on the type of insurance you have. You’ll need to take a look at your policy or ask your insurance agent.
Does Auto Insurance Cover Rental Cars?
Some types of auto insurance do cover rental cars. If you have just the minimum amount of insurance required by state law, though, you likely won’t be covered. The same applies if you just have liability insurance. This insurance will only cover damage to other vehicles—not the rental car itself.
However, if you have full coverage—which typically includes collision, comprehensive, and liability insurance—on your personal car, that coverage will more than likely extend to a rental car driven in the United States. But it depends on the type of vehicle you are renting. For example, if you are insuring your personal vehicle, which is a Hyundai, that insurance coverage may not be adequate to rent a luxury vehicle. To ensure you have enough coverage, it may be wise to purchase additional coverage. So auto insurance does cover rental cars, but only to a certain degree.
Do I Need Rental Car Coverage?
It’s always good to have rental car coverage if you’re driving a vehicle you are renting. Even if you are fully covered by your insurance company, there are additional coverages that you may want or need, such as the following:
• Collision damage waiver. This waiver means you will not be held responsible for any damage to the vehicle (not personal belongings).
• Personal effects coverage. This covers your personal items if they are damaged or stolen from a rental car.
Keep in mind that certain credit cards also offer rental car coverage, so check with your card issuer for any benefits.
What Happens If You Damage a Rental Car Without Insurance?
If the answer to the question “Does my insurance cover rental cars?” is no, and you damage a rental car, what happens next? It depends on who is at fault.
If the accident was your fault, you’re on the hook for all the damages. You may also be liable for additional fees from the rental company, including loss of use, diminution of value, and administrative fees. If you are not at fault, the rental company will work to recover compensation from the other driver’s insurance company.
It is typically illegal to drive a rental car without any insurance coverage. Rental car companies generally must provide the state’s minimum liability coverage on their vehicles, but not all states have this requirement. What this means is that if you don’t have liability coverage, you could end up with a huge bill, along with a suspended license.
Make sure you’re covered the next time you rent a car. You don’t want to be on the hook for any damages. If you’re not sure, purchase extra insurance. It’s better to be safe than sorry!