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Rental Car Insurance
It’s a situation many of us have found ourselves in: you’re at the rental car counter, checking in to pick up a vehicle you booked months ago. But before you can check out, you’ve got a question to answer: are you buying supplemental insurance coverage, or will you decline it and wonder if you should have taken it?
To be fair, it’s not a question with an easy answer. There are many factors to consider before choosing whether to accept or decline additional rental car coverage. But looking into it ahead of time, learning about what to expect and having a good understanding of car insurance – as well as your own personal policy – can help make your decision easier.
Not sure if you should hand over the extra cash for coverage? Here are a few details to keep in mind, so you can help protect yourself without wasting money:
Does My Current Car Insurance Cover a Rental?
The first factor that should influence your decision is your existing car insurance coverage. Take the time to review your coverage. What sort of comprehensive, collision and liability coverage do you have? Does it extend to rental cars you may drive? In many cases, your existing policy will cover rental vehicles — at least to some extent. If you aren’t sure if your car insurance policy covers rentals, check with your agent or insurance representative.
Do I Need the Auto Coverage Offered by the Rental Agency?
You’ll need to look at the types of coverage the rental car company is offering and requires. Is it coverage that your existing policy doesn’t provide, or does it overlap with your personal insurance in most areas?
Rental car agencies typically offer extra coverage for the following options:
- Liability coverage to help protect you if someone is injured or there is property damage as a result of an accident that’s your fault. There’s a good chance your existing policy covers this already. Check your policy to determine if you could benefit from supplemental liability protection from the rental car company.
- Personal accident insurance to help pay you and your passengers’ medical bills if you’re injured in a rental car accident. Your existing policy and personal health insurance may provide coverage comparable to what the rental company is offering.
- Personal effects coverage may help cover your personal belongings, such as a cellphone or clothing, if they’re stolen from your rental car. If you have renters or homeowners insurance, these items may already be protected.
Car rental companies also offer non-insurance products called waivers. Collision damage and loss damage waivers aim to waive certain fees and expenses if the rental car is stolen or in a collision. These waivers are only effective if you’re not violating any laws (such as speeding, driving while intoxicated, etc.) when the incident occurs.
Does the Type of Car I Rent Matter for Insurance Coverage?
It’s also important to consider the type of vehicle you’re renting and, perhaps more importantly, how similar it is to the cars you already have insured on your personal policy. If you’re renting a car that’s around the same in size, price and general safety features, there’s a good chance your existing policy will provide adequate coverage on the rental. If, on the other hand, you’re opting for a more expensive or atypical ride (say a speedy sports car or pricey luxury convertible), then your personal policy may not be sufficient.
If you’re renting a car through a membership-based car sharing service, the insurance costs are typically included in the fee. However, if the car is involved in a collision or is stolen, the renter may be billed for a specific dollar amount that is stated in the membership agreement. For an additional cost, customers can purchase a ‘waiver’ to avoid paying the accident fee.1
Credit Card Rental Car Insurance
Have a credit card or two? Pull up your agreements and look for any rental car benefits your credit card may include. Many credit cards offer rental car insurance as an added benefit to cardholders. These can either replace your primary insurance coverage or offer supplementary coverage depending on the card and provider.
To leverage these benefits, you’ll need to book and pay for the car rental with the credit card in question.
How Much Is Rental Car Insurance?
Your finances should also play a role in your decision. Because additional rental car insurance adds to your expense, it can impact your budget — especially if you’ll have the car for some time. Loss waivers can add even more costs to your bottom line.
Before deciding whether to purchase extra coverage or not, determine your rental car budget. If you’re on vacation or are in the process of repairing your personal vehicle, you might also have other budgetary concerns to factor in. Remember to consider the cost of possible damage to the rental (or a full-on wreck), and how it could impact your finances.
Do I Really Need Extra Rental Car Insurance?
Another big consideration should be how long you’ll have the car for and where you’ll be taking it. Just need the vehicle for a few hours’ trip to and from the airport? Driving it cross-country for a two-week trip? Consider the situation for which you’re renting the car and weigh the circumstances to come to a decision on buying rental car insurance.
You also may want to check the limits on your personal insurance policy. Some only extend to rental vehicles for a certain amount of time. If you’ll have the car longer than that, supplemental coverage may be necessary.
Get Your Insurance Agent’s Recommendations
In the end, consider making a quick call to your insurance agent. They can give you a run-through of your existing coverage, as well as recommend any additional rental coverages you might want to consider. They also may be able to add an endorsement to your policy that expands your rental car coverage for a small fee.
Not sure if your Travelers car insurance policy covers rental vehicles? Want to learn more about auto insurance or get coverage for your cars? Contact a Travelers agent today.
Car Insurance
It’s not an uncommon scenario: Your car is at the mechanic’s shop being repaired and your mother-in-law has offered her car to you until yours is road-ready again. Or you’re home from college for a visit and want to meet some friends, but you left your car on campus. In any situation, should you borrow someone else’s car or let someone borrow yours? Would you still be covered if you do? What happens if you or they are in an accident?
As a driver, there are times when you may find yourself in a position of driving someone else’s vehicle or lending your vehicle to someone temporarily. Regardless of the scenario, there are some things you need to know. Are you (and your vehicle) protected in case of an accident? Does your insurance follow the car or the driver?
Does Car Insurance Follow the Car or the Driver?
Car vs. Driver Coverage
The answer isn’t so cut-and-dry. Insurance coverage varies from insurer to insurer and policy to policy, but generally, there are coverages that can follow you or your car. There are several factors that determine whether and to what extent a person or vehicle is covered, including the names listed on the insurance policy, the state where you live and whether you have the permission to drive someone else’s vehicle.
Does My Car Insurance Cover Other Drivers Who Operate My Vehicle?
Your car insurance typically will cover other drivers operating your vehicle if they’re listed on the policy. This may include your spouse or significant other, your parents, your siblings or your children. It also may include other household members.
For others not listed on your policy – like friends or extended family members – the issue becomes murkier. Whether the policy provides coverage in these situations typically depends on consent. If other people drive your car with your permission (meaning you’ve verbally told them they could drive your vehicle, or you handed them the keys), then typically they should be covered under the terms of your policy.
There are a few scenarios in which certain drivers and activities will generally not be covered by your policy. These include:
Paid Car-Sharing
In most cases, your insurance will not extend to other drivers if they’re paying to use the car (for example, you’re renting it out to a car-sharing company). You will likely need an additional, specific auto insurance policy to cover this activity.
Excluded Drivers
Excluded drivers (those specifically listed on the policy as not covered) will typically not be covered when driving a car under your auto insurance policy. In some states, excluded drivers may have a minimal amount of coverage, though this (and the exact type of coverage provided) will depend on where you live. You should check with your auto insurance carrier for guidance on this.
Commercial Activities
If you use your vehicle for commercial purposes, your insurance policy will typically not cover incidents occurring during this type of use. This can include using the vehicle to deliver pizzas, driving for a transportation network company that offers car rides or ride-sharing, or operating some sort of delivery or concierge service. You will likely need a separate insurance policy or supplement to insure these types of activities.
Does My Car Insurance Cover Me When Driving Another Vehicle?
If you’re specifically listed on the car owner’s insurance policy, you’ll be covered when driving that car – even if it’s not your own. If you’re not on the owner’s policy, applicable coverage will again depend on consent.
Assuming the driver gave you consent to operate the vehicle or, at the very least, there is reasonable belief that you had permission to drive it, then you’re probably covered. If you pay to drive the car (for example, you rent it from a rental car company or a car-sharing service), then this generally constitutes assumed permission as well.
Stop Distracted Driving
Very interesting… isn’t it!