Does my car insurance cover my rental car?

Whether you are on a business trip or on a vacation, you may have heard the question normally asked by car rental companies; ie if you want additional insurance for your rental car. You could say yes and buy it out of fear or decline it, assuming you are covered for the purchase of a rental car. However, the reality is that unless you look up your current auto insurance policy and see if you’re covered, you won’t really know and may be missing out on some savings. It is therefore always a good idea to call your insurance agent to get the details about your policy.

Normally there are two cases where you are covered by car insurance for a rental car. Both ideas have their pros and cons.

Having car insurance. Some insurance companies also extend their coverage to rental cars, as long as you go on vacation, so check with your insurance agent. But know that any coverage gaps you have on your policy will extend to your rental car as well. And if you’re traveling for business, you’ll need to let your employer pay for the insurance, as your auto insurance doesn’t apply.

Have car insurance with a credit card company. Some credit card companies can offer you protection for cars rented by their credit cards. While coverage varies by credit card issuer, the terms of your policy may change from time to time. However, insurance protection usually only covers the physical damage to the car; it usually does not cover personal injury, liability or theft of personal property.

Types of Supplemental Auto Insurance Coverage by Rental Services

If you know that additional coverage will suit your situation, know that most car rental companies usually offer four general insurance policies:

Collision Damage Insurance and Loss Damage Insurance (CDW and LDW). Pays out if your rental car is lost, stolen, or damaged in a collision.

Personal Accident Insurance (PAI). Pays your medical expenses as a result of a car accident in your rental car.

Supplemental Liability Insurance (SLI). Gives you up to $1 million in comprehensive liability coverage.

Personal Property Coverage (PEC). Pays out for any personal belongings of yours that are stolen from your car rental.

Some things to keep in mind with auto insurance

Here are some tips to keep in mind as you figure out whether you want to add extra coverage to your car rental:

Don’t buy the same coverage twice if you have auto insurance unless you have coverage shortfalls.

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Talk to your auto insurance agent before deciding to purchase additional auto insurance for your car rental.

Ask the car rental company for a copy of their insurance policies.

Compare the company’s price with auto insurance quotes in your area to see which one is best.