When renting a car to travel within the United States, coverage from your existing auto insurance policy will transfer to the car you are renting. The car rental company will probably try to sell you insurance when you’re renting the car. This additional coverage may not be necessary, but it’s important to understand the auto insurance coverage you have.
Do I need car rental insurance?
There are three main coverages to consider when renting a car. If you have these coverages on your existing auto insurance policy, the coverages will transfer to the rented car while you are using it.
Auto liability coverage is required in every state and provides coverage for damage to property or injuries to others when you are at-fault in an accident.
Auto insurance collision coverage provides coverage for damage caused to the insured vehicle by hitting another vehicle or a stationary object.
Auto insurance comprehensive coverage covers fire, theft, vandalism, broken glass, and damage caused by hitting an animal.
It’s important to note that if you do not have collision coverage or comprehensive coverage on your existing auto insurance policy, you will not have those coverages for your rental car unless you buy insurance from the rental car company or add these coverages to your existing auto insurance policy before renting a car.
You will also be responsible to pay the deductible you chose for your existing auto insurance policy if there is a claim for collision or comprehensive coverage with your rental car.
In which ways am I not covered by my existing car insurance policy?
Even if you have liability, collision, and comprehensive coverage on your existing auto insurance policy, there are still two ways in which you are not covered.
Diminution means that something has become worth less in value. If you have an accident in a rented car, even after the damage is repaired the vehicle has lost some of its value. The rental car company can pursue you for damages.
Loss of Use
Loss of use refers to the lost income suffered by the rental car company if their vehicle is damaged and out of service while being repaired. During that time, the rental car company can’t rent the vehicle to anyone else and loses that potential income. The rental car company can pursue you for lost income.
Loss of use and diminution are not covered by your existing auto insurance policy.
Typically, the coverage extending from your existing auto insurance policy will be honored for up to 30 days for non-business use. Limitations on length of coverage and type of use may vary by insurers, so be sure to check with your insurance agent and use that opportunity to review your auto insurance policy.