Rental Car Insurance: Friend or Foe? What You Need to Know ?

Planning to Rent a Vehicle for Personal Use...Do you need to purchase their insurance, or will your insurance extend to the rental vehicle?

​This depends on several factors. 

• What type of vehicle are you renting. ? A personal passenger vehicle like a car or minivan, or a box truck moving vehicle? A personal vehicle in most cases would be covered if it is a temporary replacement of your covered vehicle.  Typical insurance policies would cover a rented personal passenger type vehicle for the same coverage  that has  been purchased on your personal policy.  Therefore, you would have the same liability limit and  physical damage coverage deductibles  on the rental vehicle that exists on your personal vehicle.  If you  only carry liability coverage on your policy your policy  probably will not cover physical damage to a rental car as you have not purchased that coverage on your policy.

• However, a moving truck (box truck) is a commercial vehicle and is typically excluded from coverage on a personal auto policy.  Some large pickup trucks might be excluded as well depending on their weight and how the policy is worded.

Do you carry physical damage coverage on your personal vehicle or only liability coverage? 

• If you  only carry liability coverage on your policy, it most likely will not cover physical damage to a rental car, as you have not purchased that coverage on your policy.

Another factor to consider when determining whether to purchase the rental companies insurance is your deductible. 

• If you purchase the rental companies  insurance  you  most likely  will not have to pay a deductible in the event of a loss.   If you need to set up the claim on your insurance any damage to the rental vehicle would  have the same deductible as carried  on your policy and you would be responsible for paying it.  You also have to recognize that a claim on your policy  could make more of an impact on  your future rates than  if  the rental company  pays the claim.  Although, if you are at fault your insurance rates will reflect any violations or accidents that appear on your Motor Vehicle Record.   

Where are you driving the rental car?

• If you are renting a vehicle and driving in a location that is not covered by your personal auto policy the coverage would not extend.  If you are planning to drive anywhere out of the United States it is essential that you speak with your insurance agent to find out if there is coverage.

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What insurance company is your insurance with?

• Although most insurance policies are developed from similar forms, each insurance company has written their policy independently.  A coverage that is included with one company may not be given with the policy from another insurance carrier.

The best bet anytime you are concerned about coverage  is to consult your agent. This is another example of how a local agent can be of great value to the policyholder. They can explain whether your policy will or will not cover the rented vehicle.