Do You Need Auto Insurance For A Rental?

When the summer weather hits, most people can’t help but daydream about taking a long road trip. Rather than put the miles on their own cars, they opt to rent a car for as low as $12/day. Yet, when they get to the rental company, they are offered on-the-spot auto insurance. This option is confusing for drivers and many people needlessly wind up paying an extra $20 – $40 per day just for the added peace of mind.

Does My Auto Insurance Cover Rentals?

The National Association of Insurance Commissioners says that auto insurance for rentals is typically covered in existing policies somewhere. Health insurance companies, auto insurance providers, homeowner’s insurance and credit card companies all typically have some type of rental car insurance coverage included. Business executives may be covered by their employers’ insurance company and AAA members may have special coverage as well. Every policy is different, however, so drivers will need to ask their insurers, specifically, if they will cover their rental vehicles.

What Insurance Does The Rental Car Company Offer?

The NAIC says rental car companies offer protection in the form of a collision damage waiver, liability insurance, personal accident insurance and property damage insurance. Most commonly, a collision damage waiver is offered, which isn’t insurance, per se, but rather, more a way to prevent paying a high deductible upfront in the event of a crash. It’s important to keep in mind that the person behind the counter at a rental car agency is not a licensed insurance broker. What the rental agencies offer is 10-20 x more than liability coverage on a traditional auto insurance policy — and it covers less.

Get Insured!

Regardless of who agrees to pay for damages, auto insurance is mandatory. Find out how you can get more coverage for less by shopping around and getting a free auto insurance quote online. It only takes a few minutes and it could save you hundreds on your premium payment!

Do You Need Auto Insurance For A Rental? 1

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