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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 automobile 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 per day for Avis, National, Budget, Alamo, plus the extra cost.As illustrated, the cost of adding a policy 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 if you are covered.

That is why it is so important to ensure that you have a policy to cover your rental vehicle.

Take a look at some of the facts at Investopedia here.

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

With that said, you may be asking yourself “Will my auto premium cover this 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 the agency is not mandatory. You don’t have to buy it. 

Before you accept or decline the add-on from the company, consider these important factors regarding your policy.

Types of Policies

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

As you will see in the table below this can get expensive.

The automobile at $15 a day can increase to $45 a day.

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

Remember you are not required to buy a policy from the agency.

However, they are going to pushy and urge you to buy it.

The column on the far left are the agencies policies.

The column on the far right is your personal policy 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 Extend to the Vehicle?

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

Because you don’t own the automobile, your standard policy must specifically state that your regular policy will extend to it.

Even Geico states “it depends”.

The best thing to do is ask your insurer if the automobile is covered by it. Not rental reimbursement, but a policy for a vehicle at Avis, Budget, or Alamo.

In fact, the only way to know if the coverage which is provided by your insurer extends to the automobile 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 policy identical to that of your normal vehicle?

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

If you can’t find any details regarding your plan, I advise you to contact your current provider to inquire about it.

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

Deductible Cost if in an Accident?

Even if you know your policy covers rentals, 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.

Cost through Payless, Dollar, Enterprise, and Advantage companies.

When you shop for a company which is significantly cheaper, such as Payless or Advantage, the additional cost is $11 to $26 per day. You probably didn’t get the savings you expected at the time.

You may want to discuss your 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?

  • What kind of automobile will I be driving?

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

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

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

Your insurer may place restrictions on the type of automobile 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 You Cannot Get Covered?

Not all auto insurance policies will cover the automobile you decide to rent.

The less coverage in your policy, the less likely it is that your policy includes it.

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

  • Renting agency

  • Your credit card company

If you’ve ever rented an automobile, you’ve more than likely been asked if you would like to purchase additional plans or an add-on.

The add-on can bump the overall cost 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 or more.

Credit Card Companies

Your credit card company may also offer some kind of coverage.

However, they will only provide it, if you use their card to pay for the 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. 

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 insurer or credit card company to find out if the automobile you plan on renting will be covered, and if so, how much 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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