If you’re like many travelers, you may reach your destination and head for the rental car desk. Sometime during the process of renting a car, the agent asks, “Would you like to take the optional insurance?” And you think to yourself, “Does my auto insurance cover rental cars?” If you’re safety minded, you may choose to pay for the rental company’s extra insurance, uncertain if you’ll be on the hook if you get into an accident with the rental car. Is this the right decision? Are you double-paying?
So DOES My Auto Insurance Include Coverage for Rentals?
The answer is “it depends.” In some cases, your personal auto insurance policy may include coverage of rental cars, but unless you check specifically, it’s impossible to be certain. (And please don’t assume that’s the case without checking.)
If your current auto insurance policy includes comprehensive and collision coverage, it’s probable – but not guaranteed – that it will cover repairs for a rental vehicle as well as liability coverage. It’s a good idea to check with your insurance agent and review your policy before you pick up your rental car so you can know for certain (and avoid spending an hour on hold with your insurance company while standing at the car rental desk).
My Insurance Covers Rentals. Should I Still Take the Insurance Option?
Even if you’ve established that your own personal auto insurance policy covers rental vehicles, it’s not a bad idea to pay the rental company extra for the insurance option if you can afford it. Since the policy will be local to where you’re renting the car, any claims will be faster and easier, and the administrative footwork will be borne by the rental company instead of you. (This is particularly true if you’re in a foreign country.) You’ll also be avoiding the risk that the accident will send your own policy premiums soaring. Rental car coverage from the rental company is not cheap, however, so you’ll need to take some time to weigh the costs and benefits.
Don’t Confuse Rental Coverage with Rental Reimbursement
It’s an easy mistake to make: you think you’ve read something about rental cars in your current policy, so you assume they are covered. What you may have read is that your policy offers rental reimbursement as an add-on feature, which means that the insurance company will pay for a rental for you when your own vehicle is in the shop. This is not the same thing as covering damage to a vehicle you’ve rented for personal or business use.
Be Mindful of the Type of Car You Rent
Just because your personal auto policy covers damage and liability for your 2015 Honda Civic does not mean it’s going to extend to a car of higher value. If you’re on a bachelor or bachelorette weekend and rent a Porsche for fun, don’t expect your current policy is going to cover the vastly larger repair bill for a specialty or luxury vehicle.
Check With Your Credit Card Features
Even if your current auto policy doesn’t cover rentals, some credit cards do offer rental coverage as a perk to using the card. Check the fine print of your credit card agreement or call your card company and ask.