Do You Need Insurance To Rent A Car?
There are many situations where car insurance is not something you need. If you don’t own a car, for example, you probably don’t have car insurance. If you drive someone else’s car and they have insurance, you probably don’t have your own car insurance policy. Conversely, if someone else’s policy covers your car, you probably don’t have car insurance of your own. If you live in a state like Virginia or New Hampshire, where insurance isn’t required, you may choose not to have car insurance.
For all the situations where you don’t need a car insurance policy, you may wonder when you’re ready to rent a car if you can rent if you don’t have car insurance. The short answer is no because your rental car will need to have insurance, but the answer is a bit more in-depth than that.
If you do not have your own car insurance, but you need to rent a car, you can rent a car if you do not already have car insurance. So, don’t worry. You can still take your trip.
In fact, your situation is so common that most car rental companies actually offer their own insurance for your rental car. So, don’t let your lack of personal car insurance stop you from finding a car rental company that’s right for you.
Rental Car Insurance: Did You Know?
You may be surprised to learn that rental cars are already insured, and that makes a lot of sense if you think about it. Rental cars available from the rental car company are the company’s assets and their product. Cars are expensive assets and products to replace, repair, and keep maintained.
Just like you insure the valuable things in your life like cars, homes, and your loved ones, rental car companies want to protect themselves from asset losses, and that’s why rental cars are already insured.
The rental cars are insured, but it is typically the bare minimum insurance required. This is usually part of the cost of renting the car. However, your rental car company will offer you supplemental insurance to add to the insurance the car already has so that you can protect yourself from responsibility in the event of an accident.
If you had your own personal car insurance and it carried over to cover your rental, it would not make much sense to purchase additional supplemental insurance policies because it costs money that you don’t have to spend. It can cost you up to about $40 more per day, so if you don’t need it, don’t get it, right?
However, if you don’t already have any car insurance, you would want to consider your supplemental insurance options when you rent a car. You may wonder how much supplemental insurance you need, so to answer that, consider these three questions.
Rental Car Insurance: When Do You Need More?
You know you don’t have your own insurance. You know you have some insurance included in your rental. Now, you’re being offered more insurance. Do you need it? Or is some of it unnecessary?
What Does The Insurance Included Cover?
Wisely, rental car companies insure their assets which are the cars they use to provide services. Most companies offer insurance as part of the rental, but that insurance usually only meets the minimum requirements in the state where the car is located. Every company is different, though, so you will want to ask what’s included in your rental.
If you are traveling across state lines while you are renting a car, you will need to meet the requirements in the state you are traveling from and the state (or states) you’re traveling to. Insurance requirements can be different from state to state. Be sure to do your homework before you travel because every state in the United States has a minimum car insurance requirement.
Am I Already Covered By Another Policy?
If you don’t have personal car insurance, how can you be covered? Right? However, if you live with your family, another family member’s car insurance policy may cover you already. Be sure to ask to possibly save yourself from paying for something you don’t need.
Likewise, the health insurance that you have through your job or from a family member may cover you in the event you are injured in an accident. You’ll want to check before you add any supplemental coverage to see if you are already covered some other way.
Lastly, if you travel a lot, you may have travel insurance which could cover your car rental and would also offer you coverage as you – you guessed it – travel.
Can I Get Coverage From My Credit Card Company?
It’s pretty common practice to use a credit card to pay for your car rental. To entice cardholders to use their card over other credit cards, some credit cards offer free insurance when you use their card to pay for your car rental. You may not even know that you’re eligible for this perk, so you will want to call and ask.
When you call, ask the credit card company to provide the details of the available coverage. If you don’t need additional coverage after what they offer, you can save yourself some money.
Accidents happen, and they don’t call ahead to let you know they’re coming. So, it’s better to be prepared. Make sure you have enough coverage so that you don’t end up in a tough situation because of an accident.
Before you sign up for insurance, educate yourself on the types of rental car coverage.
Four Types of Rental Car Coverage
It’s important to understand the types of insurance coverage available for your rental car. Here are the four types and what they do to make an informed decision about what you need and what you don’t.
1. Collision Damage Waivers
These waivers cover damages to the car in the event of an accident. This is important because without it if something happens to the car while you are renting it, you will be financially responsible for repairing or replacing it. This is occasionally part of the automatic insurance and factored into the rental cost, so be sure to ask your rental company.
2. Supplemental Liability Insurance
Supplemental liability insurance covers other people in wrecks in which you are ruled to be at fault. Most states require liability insurance of some kind. Still, you may want to consider adding supplemental liability insurance coverage to have a lower deductible in the event of an accident.
3. Personal Accident Insurance
Personal accident insurance works similarly to supplemental liability insurance in the kinds of things it covers, but instead of covering other people in the event of an accident, it covers you and your passengers in the event of an accident. As mentioned previously, any medical insurance you already have may cover you, so this may be a needless addition to your insurance coverage.
One thing to keep in mind, though is that your personal accident insurance would kick in when the coverage you have from medical insurance drops off. So, while you may be covered, you might want to consider the additional protection if you can afford it. A little extra for the trip may save you thousands or more later.
4. Personal Effects Coverage
Personal effects coverage protects you and your stuff in case your items are stolen from the rental vehicle. You will be reimbursed for your items if you lose them this way.
This coverage and protection are excellent if you know you will have valuable property in your rental car. If you know it is just going to be you and the wallet you keep on your person in the vehicle, this coverage may not be for you.
In the event of an accident, it’s unlikely that the liability-only insurance will be enough protection to cover you safely, your rental car, and anyone else involved. Suppose you have the unfortunate experience of having your rental car damaged while it is in your care. In that case, you’ll want to be sure you’re covered by using a wise combination of liability and collision coverage to give you peace of mind.
Summary
You don’t need to have insurance before you rent a vehicle. However, you will need some coverage for the rental itself. You may choose to keep only the insurance that comes as part of the car rental.
However, you may want to add supplemental insurance that the car rental company offers to make sure you’re sufficiently covered in the unfortunate event of an accident. Consider the costs that could happen, and make the best decision for your circumstances.
Be sure to check with other coverage points like your health insurance, your homeowner’s insurance, and your credit card company to see if you have coverage that will suffice already. Prepare to be prepared.
Sources:
Liability Insurance Definition | investopedia.com
Automobile Financial Responsibility Laws By State | III
Does Health Insurance Cover Car Accident Injuries? | pstriallaw.com
