rental car insurance

Everything You Need to Know About Rental Car Insurance

It’s that time of year - vacation season.  If you are planning to travel and a rental car is in your plans, here is some must have information to help you navigate your options and get you the coverage that you need.  

While the complete coverage option add-ons are a tempting security when you reserve your rental car, there are a few things you want to check before signing up for extra auto insurance the rental agency offers to you.  First, check your personal auto insurance policy to see if it covers rental cars. Most policies do offer some type of coverage in that area if you are driving the vehicle for personal use, and your limits and deductibles most likely apply to your rental car lease.  Check your policy or contact your insurance agent to find out what your policy covers for rental vehicles.


The second thing you want to check before signing on for the extra rental insurance is the credit card that you use to make your rental reservation.  Some credit card companies offer some type of rental car coverage. It’s simple to check the rental coverage options offered by the credit card company by calling the customer service number on the back of your credit card.  

Rental car companies mostly offer you four types of insurance add-ons: Loss Damage Waiver, Liability, Personal Accident, and Personal Effects insurance.  A Loss Damage Waiver waives your financial responsibility if the rental car is stolen or damaged while in your care. It also covers loss-of-use charges while the vehicle is in the shop in addition to towing and other fees.  Liability coverage is state mandated and protects you against potential lawsuits that could arise from an accident while in your use. Personal Accident Insurance covers your medical expenses should you suffer injuries in a potential accident. Lastly, Personal Effects Insurance covers your personal items kept in the vehicle during your time of use.  

If you already have an auto policy, you are covered in the case of injury or property damage while driving a rental.  Also, the comprehensive and collision coverage will guard against damage to the rental itself. If you do not have those coverages on your personal auto policy, then you should consider adding the Loss of Use Waiver to your rental agreement.  

You can save a significant amount of money by declining the three other types of rental insurance depending on your policies.  Check your renters/home insurance, health insurance, and auto insurance policies to see if they already cover the liability, personal accident, and personal effects insurance offered for purchase by the rental car agency.