Renting a car should be a straightforward process, but once you get to the rental counter, it can quickly get confusing. This is especially true when you’re presented with various rental car insurance options and feel the pressure to buy coverage.
Before you purchase additional rental insurance, you should understand what your own personal auto insurance policy covers with car rentals. If you don’t have a personal policy, don’t worry. You have options aside from the ones presented to you at the counter.
Are there any insurance requirements to rent a car?
The rental car company is technically the owner of the rental car, so they are legally required to carry the state’s minimum insurance requirements on each rental car.
While you don’t have to have your own auto policy to rent a car, there are a few requirements, such as:
- A valid driver license: You must show proof of a valid license when you rent a car. Not only can the car rental company confirm a valid license with the DMV, but the company can also check for recent driving violations or convictions.
- Age requirements: Most car rental companies require you to be at least 25 years old to rent a car. If you’re younger than this, check with the rental company to confirm the policy.
- Payment: A deposit is required by most car rental companies, and using a credit card is the preferred payment method. Be aware you might have to show proof of insurance when renting a car with a debit card.
If I have personal car insurance, can I use it on my rental?
Yes, your personal car insurance policy extends coverage to your rental cars. Before you rent, it’s a smart idea to verify the extent of your personal policy coverage for rental cars. This means that you should check that the coverage limits and options you’ve added to your own personal policy also apply to rental cars.
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Under your personal policy, the “broadest level of coverage” is applied to rental cars. In other words, the highest limits on your policy will kick in if you’re in an accident or there’s damage to the rental car, or if you cause damage to property with the rental. You also pay the same deductibles as you would if you were in your own car.
You don’t have to show proof of insurance when you rent a car, but again, the exception to this is when you’re paying with a debit card. If that’s the case, you may be asked to show proof of having your own policy.
How can I save money when purchasing rental car insurance?
If budget is a concern, you’re better off using your own personal policy when renting a car, in which rental car coverage is likely included. You should also verify coverage from your own health insurance and credit cards, which are supplemental to your auto policy coverages.
There are a few benefits to purchasing rental car insurance, including:
- If you’re traveling abroad: Your personal auto policy only covers you within the United States, but rental car insurance can cover you abroad.
- Your personal auto policy is limited: If you only carry the state minimum requirements, then consider adding enhanced coverage.
- You’re traveling for business: If your company doesn’t cover rental car insurance, then it’s a good idea to get separate coverage versus relying on your own auto policy.
Can I rent a car without having personal car insurance?
The good news is that if you don’t carry a personal auto insurance policy, you can still rent a car. For those of you who haven’t purchased a vehicle, you can pick up a rental like any other vehicle owner could.
You can get coverage in other ways, including:
- Purchasing rental car insurance through the rental car company, although this is more expensive and can cost upward of $30 per day additional.
- Purchasing a non-owner car insurance policy or stand-alone policy. This is a policy for those who don’t own a vehicle, but find themselves driving regularly — including car rentals. This is usually more cost-effective than purchasing through a rental car company.
Types of rental car insurance
Similar to a personal auto insurance policy, rental car insurance offers various categories of coverage. It’s good to understand your options, but make sure you also know what your own personal policy covers for rental cars.
Here’s a quick look at the options you’re likely to be presented with when renting a car.
Personal effects coverage
Personal effects coverage may help cover the expense of replacing any personal items and belongings that were damaged or stolen from the rental car, such as a smartphone or laptop. If you have a homeowners or renters insurance policy, your personal property coverage would likely cover you since you’re off-premise, but your deductible would apply.
Collision damage waiver
Also known as Loss Damage Waiver, this absolves you of financial responsibility for a stolen or damaged rental car. It’s also used by the rental car company to cover administrative costs, such as loss of use, towing and other fees. Keep in mind that if you have collision and comprehensive coverage on your personal auto policy, it would likely cover rental car damage.
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Personal accident insurance
If you’re in an accident while driving your rental car, personal accident insurance provides both you and your passengers coverage for medical and ambulance bills resulting from the crash. Your health insurance also factors in. If you do have a personal auto policy, verify your PIP coverage (personal injury protection) — it likely extends to rentals.
Even though the rental car companies are required by law to carry the state minimum requirements, this usually isn’t enough for adequate coverage. You can purchase this liability-only insurance if you don’t have your own auto insurance policy. If you do have a personal policy, your liability coverage should suffice.