Does personal auto insurance cover rental cars?

If you're renting a car, you may be wondering if your own car insurance covers rental cars. 

The good news is that, in most cases, the answer is yes. 

It’s just that not many people actually read the fine print to know if they will be covered and what the limitations are to this coverage. Those who are covered by their own auto insurance can breathe a sigh of relief. 

However, there are some exceptions to this rule. So it’s always a good idea to thoroughly check your policy to make sure you’re really covered.

How do I know if my personal auto insurance covers a rental car?

Most personal auto policies will provide some coverage for a rental car, but you have to do your due diligence to make sure that this is the case with yours. Here are some ways to find out if your existing policy has rental car coverage:

Examine your personal auto insurance policy

The first step is to check your auto insurance policy documents to see what type of coverage for rental cars, if any, may already be included in your personal auto insurance policy. 

In many cases, your personal auto insurance policy will extend coverage to a rental car as long as the vehicle is used for personal, non-business purposes. If you use the rental car for business purposes, however, you have to get covered for that intended purpose. 

Determine what type of car insurance you have

When it comes to auto insurance, it's important to understand what you're covered for. Many people think that their auto insurance policy covers them for any type of accident, but this is often not the case. Even if your personal auto insurance policy covers damages to a rental car, there may be some restrictions on the type and amount of coverage that is provided.

There are three main types of car insurance: liability, collision, and comprehensive. 

  • - Liability insurance covers damage to other people or property if you're at fault in an accident
  • - Collision insurance covers damage to your own car if you're in an accident, regardless of who is at fault 
  • - Comprehensive insurance covers everything else, including theft, vandalism, and natural disasters.

Learn about your insurance coverage policy limits

Once you know what type of insurance coverage/s you have, then you will want to find out your policy limits. An insurance coverage policy limit is the maximum dollar amount that an insurance company will pay for damages or losses covered by an insurance policy. 

Policy limits are important to understand because they may affect whether or not you are able to fully recover from an insured event. If your damages exceed the policy limit, you may be responsible for paying the difference out-of-pocket. It's important to know what your policy limits are and to make sure they provide enough coverage for your needs.

Aside from your policy limit, you also need to learn about your policy’s deductibles, if any. 

An insurance deductible is the amount you have to pay for a covered loss before your insurance company starts to pay. For example, if you have a $500 deductible and your car is damaged in an accident that costs $1,000 to repair, you will pay the first $500 and your insurance company will pay the remaining $500. Some people choose to have a higher deductible so that they can save money on their premium.

Find out about additional policy coverages

Last but not the least, find out if your existing policy covers administrative fees, loss of use or towing charges. Some rental car companies will charge you for loss of use in case of damage to the rental car. You may need to purchase additional insurance from the rental car company if you want to be fully protected.

Check with your insurance agent or company to see if your policy covers rental cars

Going through the fine print of your auto insurance policy can be a cumbersome task. Even then, you may not be 100% sure you know exactly what is and what isn’t covered under your policy.

If you’re unsure, it’s always best to call your insurance agent or company and ask them to expain your coverage. This would be a good opportunity to ask clarification around your policy limit, deductible, and whatever inclusions your insurance coverage has in terms of emergency situations. 

You should also want to ask whether there are additional fees associated with coverage for rental cars. Or if there are specific limitations to your coverage. For instance, some insurance policies may include a list of from which rentals you are allowed to book.

When should you buy additional rental car insurance?

You may find the need to buy additional rental car insurance even if you have a personal auto insurance policy. This usually happens in the following scenarios:

1. If your type of coverage is limited (ie. you don’t have comprehensive and collision coverage). If you only have either collision or liability coverage, you will want to purchase additional rental car insurance.

2. If your policy only has the state minimum liability limits. The minimum limits typically cover bodily injury and property damage, but some states also require drivers to carry additional coverage, such as medical payments or personal injury protection. If you only have the state minimum, you may end up with huge out-of-pocket expenses if you get into an expensive accident.

3. If you have a high deductible on your personal auto insurance policy and want to avoid paying it in unforeseen circumstances. Or you’re already considered high-risk by your insurance company and want to avoid making a claim on your personal policy

How much are you willing to pay for peace of mind? 

In sum, there’s a good chance that your personal auto insurance covers rental car use. But you have to do the due diligence to find out the details of your coverage type, limits, and other important details. 

Many owners of vehicles will still decide to buy rental car insurance for a several reasons: they might have limited coverage or they want to avoid a potentially large deductible. 

Additional rental car insurance can be expensive. However, it can also give you peace of mind knowing that you are fully covered in the event of an accident. Should you decide to get supplemental coverage for your rental car, make sure to check Bonzah’s car rental insurance offers first - you’ll be glad you did.