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Your Auto Insurance Policy and Rental Car Coverage – What Covers What? Make Sure You Have the Proper Protection!

Whether your personal car is in the shop or you’re on vacation away from home, there are a number of different reasons why you may need or want to drive a rental car.

While driving a rental means you don’t have to worry about wear and tear on your everyday vehicle, you still need to consider the possibility that you could be involved in an accident.

Cost of a rental per day for Avis, National, Budget, Alamo, plus the extra cost of rental coverage per day.As illustrated, the cost of adding coverage through a rental company can be $12 to $26 a day. Which increases the daily cost per day significantly. You have two options. Ask you insurer if you are covered or ask your credit card company for coverage.

That is why it is so important to ensure that you have a policy to cover your rental car. Take a look at some of the facts at Investopedia here.

When you arrange for your rental car, the rental agency will most likely ask you if you would like to purchase some kind of policy add-on to cover the car you’re renting.

With that said, you may be asking yourself “Will my auto premium cover a rental vehicle”?

The answer to that question may not be as simple as a yes or no. Rather, the details of your policy could dictate whether or not your rental car is covered, and how much you’ll be liable for in the case of an accident.

Buying coverage from a car rental agency is not mandatory. You don’t have to buy it. 

Before you accept or decline the add-on from the rental agency, consider these important factors regarding your policy coverage of rental vehicles.

Types of Rental Car Coverage

When you rent a vehicle from Alamo, Enterprise, or Hertz they are going to offer you rental coverage.

As you will see in the table below this can get expensive. Your rental at $15 a day can increase to $45 a day.

To mitigate the costs you can use your own coverage or a credit card to help pay for coverage in the event of an accident, etc.

Remember you are not required to buy coverage from the rental company. However, they are going to pushy and urge you to buy it.

The column on the far left is the rental companies coverage.

The column on the far right is your personal coverage which may (or may not) cover the vehicle, etc. 

CoverageWhat does it cover?Typical CostWhat will your policy cover?
Supplemental Liability CoverageIncreases your liability coverage up to $1 million$10 to $20/dayPersonal liability (If you own a car you should have this)
Collision Damage Waiver / Loss Damage Waiver Waives your responsibility for damage to or theft of the rental car$11 to $29/dayComprehensive and collision (If you have full coverage you probably have this)
Personal AccidentProvides medical and accidental death benefits if you or your passengers are injured or killed in an accident$4 to $8/dayPersonal injury protection and health insurance (Many states require this)
Personal Effects CoverageReimburses you for any personal property that is stolen from a rental vehicle$2.50 to $7/dayHomeowners or renters coverage

Will my standard auto insurance coverage extend to the rental vehicle?

Although most insurers will cover the cost of a rental vehicle should you get into an accident with your own vehicle, it does not mean that they will transfer your coverage to any other car that you drive.

Because you don’t own the rental vehicle, your standard car insurance policy must specifically state that your regular coverage will extend to your rental car. Even Geico states “it depends”.

The best thing to do is ask your insurer if a rental car is covered in the policy. Not rental reimbursement, but coverage for a rental at Avis, Budget, or Alamo.

In fact, the only way to know if the coverage which is provided by your insurer extends to your rental vehicle is to get familiar with your existing policy.

As you look into your current policy, you should look for the following information:

  • Does your policy cover rental cars?

  • Is the coverage on rental cars identical to that of your normal vehicle?

  • Is there a difference in the amount that you’ll have to pay for a deductible between the rental car and your normal vehicle

If you can’t find any details regarding your plan, we advise you to contact your current provider to inquire about rental car coverage.

When I talked to my insurer they said it was best to use them for coverage instead of the rental company.

How much of a deductible will I have to pay should I get into an accident with the rental vehicle?

Even if you know that your policy covers a rental car, it is still best to know the details of your plan.

Remember this is not “rental reimbursement”, which is different, but coverage for a vehicle you rent from Avis, Budget, or Alamo, etc.

The deductible and liability coverage of your auto policy may differ between your normal vehicle and a rental car.

Cost of rental car coverage through Payless, Dollar, Enterprise, and Advantage companies.

When you shop for a company which is significantly cheaper, such as Payless or Advantage, the cost of adding rental car coverage is $11 to $26 per day. You probably didn’t get the savings you expected at the final cost of the rental with coverage.

You may want to discuss your rental car deductible with your agent to determine how much of a deductible is right for your needs.

You may also want to ask yourself the following questions:

  • How often will I be driving a rental car?

  • What kind of rental car will I be driving?

The more often you drive a rental car, the more likely you are to get into an accident with it.

That’s why a lower deductible is ideal for those that drive a rental vehicle as much as their own vehicle.

Just as with your standard insurance, the kind of rental car you drive could impact your liability coverage and deductible.

Your insurer may place restrictions on the kind of rental car they are willing to cover.

For example, an insurer may include fine details in your policy to limit or deny coverage on exotic vehicles.

What happens if my auto insurance does not cover my rental car?

Not all auto insurance policies will cover your rental vehicle. The less coverage in your policy, the less likely it is that your policy includes rental coverage.

If your policy does not cover your rental car, you still have options, including:

  • Rent-a-car coverage offered by the rental agency

  • Coverage offered by your credit card company

If you’ve ever rented a car, you’ve more than likely been asked if you would like to purchase additional coverage, or an add-on, to cover the rental car.

The add-on can bump the overall cost of renting a car quite a bit. The typical rate can be as high as $15 to $45 per day.

Allstate has stated many car owners could be paying double the coverage or more.

Credit Card Companies offering Rental Car Coverage

Your credit card company may also offer some kind of rental car coverage. However, they will only provide such coverage if you use their card to pay for the rental service.

Make sure to pay the full amount otherwise you are not covered.

Some credit card companies, such as Amex, may charge you a daily rate during the time of rental. 

More often than not, coverage provided by credit card companies is available at no cost, and is used as an incentive by them to encourage you to use their credit card to pay for items.

Below are the top card companies offering coverage.

 VisaAmexMastercard
CardsAllAllGold, Platinum, World and World Elite Cards
Coverage Amount$50,000$50,000/$75,000$50,000
Coverage Period15/31 days30 days15 days
Must Submit Claim Documents Within90 days180 days180 days
Claims Contact(800) 847-2911(800) 338-1670 (domestic)
(216) 617-2500 (worldwide)
(800) 622-7747
Policy DetailsMore InfoMore InfoMore Info
Final Thoughts

Before you rent your next vehicle, contact your insurance company or credit card company to find out if your rental car will be covered, and if so, how much coverage you will have available to you. 

Shaun Fyffe

Shaun Fyffe

Hi, I am Shaun Fyffe and writing is my passion. In my spare time I enjoy the outdoors, spending time with my family, sometimes I might go hiking or riding a bike, plus doing the regular hanging out - New York Style!

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