Do I Need Rental Car Insurance?

car rental agency

The best time to decide whether you need to purchase extra insurance from the rental car agency is before standing at the counter. Whether you need rental car insurance depends on several factors, such as your auto insurance coverage, credit card benefits, and the rental car company’s policy. Therefore, it’s a good idea to review your insurance policy and credit card benefits before renting a car to determine what coverage you have and what gaps in coverage you may need to fill. 

Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) relieves you of financial responsibility if your rental car is damaged or stolen. For example, suppose you have comprehensive and collision insurance on your car. In that case, you may not need to purchase CDW from the rental car agency. Additionally, your credit card company may include some collision and theft protection if the rental car is paid for with your card. On the other hand, suppose your credit card doesn’t offer coverage for loss of use. In that case, consider purchasing CDW from the rental agency. There are some items that the insurance may not cover, such as loss of use of the rental vehicle, storage and administrative fees.

Rental companies are required by law to provide the minimum liability insurance required by your state. Suppose you have adequate liability coverage on your car or an umbrella policy on your home/auto, then you may have sufficient coverage available and could consider forgoing the additional insurance.

Auto Policy Tips

  • If you don’t have comprehensive and collision coverage on your own car, your rental car will also not be covered if it is stolen or damaged in an accident. Collision coverage pays for damage to the car you’re driving if you crash into another vehicle or object or the car rolls over.
  • A non-owner auto liability insurance policy covers you for damage that you may cause to someone else’s property and liability in the event of an accident. The policy will also provide medical payments coverage for you and your passengers and under-insured and uninsured coverage. This policy also pays for an accident involving a hit-and-run driver or a driver with little or no insurance.
  • If you drive an older vehicle but plan to rent a luxury vehicle, make sure that your policy will cover the total cost of the replacement value of the car you are renting.
  • An umbrella liability policy can also meet the underlying auto insurance policy requirements when renting a vehicle.
  • Finally, suppose you are renting a vehicle that is classified as something other than a passenger car (such as a moving truck, 15-passenger van, etc.). You must purchase a separate policy from the rental company to cover that vehicle.

Renting Outside the U.S.?

In general, your U.S. auto insurance does not cover you abroad. Car rental agencies overseas usually provide auto insurance, but the required coverage is minimal in some countries. Therefore, when renting a car overseas, consider purchasing insurance coverage that is at least equivalent to that which you carry at home.

Be Prepared

If you need clarification on the coverage and limits of your current auto insurance policy, reach out to the personal lines insurance department at Henderson Brothers- regardless of whether you are our customer. Our customer-first coverage review is a service that we provide at no cost and with no obligation. By checking your policy, we can review your coverage, so you will understand what is covered in the event of an accident. Plus, as an insurance broker, we work with many insurance providers to match the best products to you after we understand your needs.

Call today for a free, no-obligation consultation at 412-754-3388. Our Personal Lines’ Consultants are dedicated to providing professional, friendly, and caring service.

Please note that the information contained in this posting is designed to provide general awareness in regard to the subject matter covered. It is not provided as legal, medical, or tax advice, nor is it intended to address all concerns in your workplace or for public health. No representation is made as to the sufficiency for your specific company’s needs. This post should be reviewed by your legal counsel or tax consultant before use.