If your travel plans include use of a rental car, a little knowledge about auto insurance could preserve your peace of mind and save you money. Before you rent, consult with your insurance agent and check your policy for coverage, limits and deductible amounts.
You may be able to save money by declining the insurance offered by the rental company if your own policy provides the coverage you need.
Other than collision
If you are involved in an accident while driving a rental, you could be liable for damage to the auto and any resulting injuries. You could also be responsible for the rental agency’s lost income and the diminished value of the rental car, if damaged. In addition, you may be responsible for losses other than collision, such as fire, theft or vandalism, while the rental is in your possession.
Drivers already named on your personal auto policy may be covered for use of a rental car within the United States. However, if the rental contract limits who can drive the vehicle, be aware of the restrictions and act accordingly. Some personal auto policies are contingent on the language of the rental contract, so you may not be covered if you let someone else drive the vehicle.
And, if you don’t have an auto policy of your own, the rental company’s insurance may be your only option.
Some personal auto policies cover collision losses to rental cars only if you already have collision coverage on your owned autos, subject to the policy deductible. Other policies offer “first-dollar” coverage on rented vehicles through their liability coverage, meaning you pay no deductible on a covered loss.
Purchasing an umbrella policy can further protect your interests by increasing your liability coverage. The umbrella also may extend your coverage territory beyond that of your auto policy. However, when traveling abroad, you may need to purchase the insurance offered by the rental company, because foreign countries may not recognize your U.S. policy.
Your personal auto policy may also provide coverage for rental of other types of vehicles: trailers, such as do-it-yourself moving trailers; pickups; vans; and trucks under a specified weight limit.
Your local, independent insurance agent can help you evaluate your coverage needs and make sure there are no gaps in your policy.
As you prepare to travel, take time to assure that the right auto coverage is in place; then relax and enjoy your trip.