Understanding rental car insurance – Enterprise Insider

  • If you already have liability or collision protection motor insurance, this covers rental cars.
  • Your credit card can also provide primary or secondary car insurance.
  • If you don't have car insurance and use rental cars frequently, consider getting car insurance without an owner.
  • Check out the insider's guide to the best auto insurance.

The vacations and summer vacations tend to be when most of the people are using rental cars and the prices are going up. In addition to the higher prices, the cost can go up even further if you need to buy a rental


Car insurance

. However, you may already have the necessary insurance coverage.

Private car insurance can cover your rental car

If you already have liability or collision insurance, it will cover rental cars in the US and, depending on the insurance carrier, possibly Canada and Mexico, Josh Damico, vice president of Insurance Operations at Jerry, told Insider. The fully comprehensive and collision protection usually extends to rental cars.

Accident insurance repairs your car if it was damaged in a collision with another vehicle or object. In the case of car accidents, it is usually a collision insurance. Fully comprehensive insurance covers damage caused by theft, fire, vandalism, natural disasters and liability for personal injury.

Damico said it was best to check with your insurance provider as some carriers exclude rental cars to keep costs down. He also said that "rental reimbursement" should not be confused with renting a car. Your personal one


Car insurance

The rental refund applies if you are involved in an insured loss and offer a rental car while your personal vehicle is being repaired. This does not apply to renting cars.

* Most states require some form of liability insurance

Home and tenant insurance covers personal property theft from car rental companies

If you have home or renter insurance, this will cover any personal effects that are stolen from your personal vehicle or rental car as a result of a break-in.

Home contents and tenant insurance covers theft of your personal property, even if it occurs outside of your home. If your personal laptop is stolen while you're in a coffee shop, homeowner and renter insurance will take care of it. If your laptop is stolen from your car, home and tenant insurance will cover the theft, but not damage or theft of your car.

Does your credit card cover your rental car?

The short answer is, it depends. Damico says credit card companies offer primary or secondary auto insurance coverage, but most only pay if the vehicle is damaged or stolen. He said you would need to ask with the credit card you use to reserve and rent the vehicle and ask if the coverage is primary or secondary.

The Insurance Information Institute said that most credit card covers are typically secondary insurances that "come into effect after your personal insurance policy or the insurance offered by the rental company is used".

Damico said if you don't own a car and don't have primary auto insurance, secondary credit card coverage isn't going to help you and you'll need to get insurance from the car rental company.

If you travel a lot and use rental cars, Damico recommends getting car insurance without an owner. Motor vehicle liability insurance is generally only covered by liability insurance for drivers who do not own a car.

Conclusion of rental car insurance with the rental company

If you don't have private car insurance, primary credit card insurance, or non-owner car insurance, you will need to get insurance from the rental company.

According to the Insurance Information Institute, the following types of insurance can be offered to you:

  1. Loss Damage Waiver (LDW) – also known as Collision Damage Waiver (CDW) "is technically not an insurance product – it is intended to relieve tenants of financial responsibility or" suspend "them if their rental car is damaged or stolen.
  2. Liability Insurance – Rental car insurance companies are required by law to provide minimum liability insurance, but this is often insufficient.
  3. Personal effects insurance – covers personal effects that have been stolen from the rental car. If you have household or tenant insurance, you can opt out of this insurance.

Damico said that buying insurance from the rental company can be $ 10 to $ 30 a day, and if you get all three it could cost more than renting the vehicle itself.

What about car sharing programs like Zipcar or Turo?

Companies like Zipcar offer hourly rentals of a variety of vehicles and usually include insurance costs in the membership fee. Zipcar's website states that it offers secondary insurance coverage. The Insurance Information Institute said that "if the car is involved in a collision or stolen, the renter may be billed a certain dollar amount specified in the membership agreement."

Turo differs from Zipcar in that the cars are not company owned and managed, but instead consumers rent a car from an ordinary person – like an AirBnB for cars. Turo offers liability insurance for owners (hosts) of cars through Liberty Mutual.

If you don't have private auto insurance and you use car sharing programs frequently, you should consider owner-free auto insurance as your primary insurance policy.

Risks without rental car insurance

If you do not have private auto insurance or auto insurance and choose to waive insurance from the rental company, you are responsible for all damage. If you have a car accident that involves another vehicle, you are also responsible for those damages and injuries and are subject to criminal prosecution.

Ronda Lee

Associate Editor, Insurance

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