“Understanding Rental Car Insurance: What You Need to Know”

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Do You Need Insurance to Rent a Car?

Your plane just landed, and you’re on your way to pick up your rental vehicle. But before you reach the rental counter, you might wonder—do you need car insurance? Typically, you don’t need personal auto insurance to rent a car. However, if you don’t have insurance for your own car, you’ll need to buy it from the rental car company or use a credit card that offers coverage. Here’s what you need to know to ensure you’re protected when you drive off the rental lot.

Does My Car Insurance Cover Rental Cars?

Your existing car insurance policy most likely provides adequate coverage for vehicles you rent for personal use in the U.S. or Canada. To be safe, check with your insurer to confirm your coverage before heading to the rental counter. Auto insurance policies typically include the following coverage:

• Liability insurance: Covers medical expenses for bodily injuries you cause to people in other vehicles and damage to someone else’s property.
• Medical payments coverage or personal injury protection (PIP): Covers the cost of medical care for you and your passengers.
• Collision insurance: Pays to repair or replace your car if it’s damaged in a collision with a vehicle, object, or animal.
• Comprehensive insurance: Covers repairing or replacing your car after loss or damage not due to a collision, such as theft, fire, vandalism, or a tornado.
• Uninsured and underinsured motorist insurance: Covers your medical care and property damage if you’re in an accident caused by a driver without adequate insurance.

Does My Credit Card Cover Rental Car Insurance?

Find out if your credit card offers car rental insurance by checking your credit card agreement or calling the number on the back of your card. Get the details in writing so you know exactly what’s covered. If you have multiple credit cards offering rental car insurance, compare each card’s coverage to find the best protection.

Credit card rental insurance usually covers the same things as collision and comprehensive insurance—that is, collision damage to or theft of the rental car. However, credit cards generally don’t cover liability, personal belongings, medical expenses, or personal injury. For those, you’ll need to rely on your personal car insurance or rental car insurance.

Types of Rental Car Insurance

Between your auto insurance and your credit card, your rental car may be fully protected. If not, you can fill in coverage gaps with insurance from the rental car company. Rental car companies typically offer four kinds of insurance:

• Loss Damage Waiver (LDW): Also called collision damage waiver (CDW), this coverage waives your financial responsibility for theft of or damage to the rental car. This waiver typically costs $12 to $30 per day.
• Liability Insurance: Pays lawsuit-related costs if you cause an accident while driving a rental car. Supplemental liability insurance generally costs $8 to $17 per day.
• Personal Accident Insurance (PAI): Pays medical expenses for you and your passengers. PAI averages $1 to $5 per day.
• Personal Effects Protection (PEP): Pays to replace personal property stolen from your rental vehicle. PEP averages just $1 to $2 per day.

Is Rental Car Insurance Worth It?

When should you buy rental car insurance, and when can you rely on your own car insurance or a credit card? You may want to buy rental car insurance if:

• Your personal auto insurance policy has a high deductible.
• You want to avoid filing an insurance claim.
• You don’t have collision or comprehensive coverage on your personal vehicle.
• You have minimal liability coverage.
• The rental car is worth more than your personal car.
• You plan to drive the rental car outside the U.S. or Canada.
• Your home or renters insurance doesn’t cover personal belongings stolen from your car.
• You don’t have auto insurance because you don’t own a car.
• You don’t have a credit card that can supplement your personal auto insurance.

If you don’t own a car but frequently rent vehicles, purchasing short-term or non-owner car insurance might cost less than constantly buying rental car insurance. Both types of coverage are designed for people borrowing or renting a car. Short-term auto insurance is usually limited to basic liability coverage. Non-owner car insurance includes basic liability coverage and may also offer personal injury protection or medical coverage. However, neither type of insurance covers you if the rental vehicle is stolen or damaged. For full protection, either rent the car with a credit card that provides the missing coverage or buy the appropriate coverage from the rental car company.

Protect Yourself

While checking whether your car insurance covers rental cars, why not do some price shopping, too? Use Experian’s auto insurance comparison tool to get quotes—and possibly save hundreds of dollars on car insurance.

Credit cards with perks such as rental car coverage often require good credit. Check your credit report and credit score before applying for a new credit card to see where you stand. You can help improve your credit score and qualify for rewards credit cards by reducing debt and paying bills on time.

Contact O1ne Mortgage for Your Mortgage Needs

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with the best mortgage solutions tailored to your needs.

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