Insurance around rental cars can be a tricky subject. Every person is different and every insurance company is different. Here are a few basic rules to keep in mind.
1. Does my car insurance cover a rental car to travel?
If you’re traveling and need a car, your car insurance will most likely extend to the rented vehicle. But, each insurance company does this differently. Many insurance companies extend the most extensive coverage you have on any personal vehicle on your policy, within your coverage territory (U.S., Canada, and Mexico). Although, if you’re traveling to Mexico, you will want to read more about how their government may not recognize your insurance in section three, below.
Again, the best way to be sure is to call your local, independent agent that services your policy. We make asking questions, like this, as easy as making a quick phone call.
2. Do I need extra insurance when renting a car to travel?
If you have car insurance, most insurance companies will extend coverage to your rental vehicle. But, when you get to the car rental counter you will most likely be presented with extra protection options. Sometimes these overlap with your existing personal car insurance coverages. This means you could potentially pay for the same thing twice. Yuck! Again, call your local agent if you have questions.
3. Will I have coverage if I travel out of the country?
Generally speaking, you can travel to Canada, the U.S. and its territories/possessions and your car insurance will still extend to your rental vehicle.
However, if you travel to Mexico, you will probably want to buy Mexican car insurance. Even if your car insurance policy states that it extends to Mexico, the Mexican government does not recognize U.S. car insurance. So, your insurance company may be able to pay for covered damages if you’re in an accident, but the Mexican government may still not recognize your insurance. Meaning, if you are pulled over by the police, you could be fined and penalized for not having insurance.
If you are planning a trip to Europe, you will likely need to purchase rental car insurance. To be sure, check your insurance company’s coverage territories.
For many U.S.-based insurance companies, if you travel overseas, your car insurance will not apply to a rental vehicle. This means you will probably want to purchase insurance from the car rental company.
4. What questions should I ask my agent or insurance company to determine if I have rental coverage?
Does my current auto policy include collision coverage?
Does my current auto policy include comprehensive coverage?
What liability limits are set on my policy? Do you recommend I buy supplemental liability coverage from the car rental company?
Do I have coverage for my own medical expenses if I am injured in an accident?
Does my homeowners or renters insurance protect items in my rental car, if they are stolen or damaged? Or, does my car insurance protect items in my rental vehicle?
How does my insurance company extend my coverages to rental vehicles?
Are there any additional endorsements or add-ons I should consider for my trip in a rental vehicle to avoid coverage gaps and hidden fees?
5. What if somebody else drives my rental car?
If you include somebody that's not on your car insurance policy on the rental agreement, things get more complex. This is because their insurance coverage for rentals may be different. If you are involved in an accident, and they are the driver, it will likely be their insurance coverage that applies.
So, even if you do your homework, if your friend is also on the agreement, and has insurance that doesn’t cover all these situations, you may find yourself underinsured.
6. What types of rental vehicles will my insurance cover?
Most insurance will extend coverage to certain types or sizes of vehicles. So, again check with your independent agent or insurance company to see how your coverage compares. For example, Auto-Owners policies extend coverage to rental vehicles that weigh 26,000 pounds or less. This generally includes most cars, SUVs, trucks and even some rental moving vehicles.
7. Does my car insurance cover a rental car to replace my damaged vehicle while it’s being repaired?
Broadly speaking, most car insurance policies include some sort of coverage for a rental while your vehicle is being repaired. However, the cost to rent a car has gone up in recent years. Check with your agent to make sure you have enough coverages to rent a car in case of an accident.
Rental car insurance can be unnecessarily confusing. Hopefully, these basic rules answer most of your questions. If you have further questions, give us a call at 478-745-7200 and we will get you the answers you deserve.