Does My Policy Cover Rental Car Insurance?


It can be overwhelmingly confusing for most people to tell whether their auto insurance covers their rental car insurance. Although a rental car agency gives insurance options to its clients during renting, it’s often confusing to know whether you should add these additional coverages to your existing auto insurance. Browse this site for more information.

Also, rental car agencies are not liable for any damages to their cars unless you’re one of their employees. So, if you hire a car from an agency for your vacation or personal needs and end up in an accident, you’ll be personally responsible. And unless you’re under coverage, you are bound to pay out-of-pocket.

So the question is: does your auto insurance sufficiently cover you if you get into an accident in a rental car? 

Important Information About Rental Car Insurance

There is no one-size-fits-all answer for this question. Whether your policy will provide coverage depends on things like the agency renting you the car, the terms outlined by your credit company, and the policies outlined in your primary auto insurance. Although rental car agencies have a state’s minimum coverage requirements for their cars, it only covers the other driver if you’re at fault. You are therefore responsible out-of-pocket for damages to the rental car.

Inquire from your credit company and your auto provider about the nature of their policies before renting a car to avoid getting into confusion and frustration during road accidents.

What Insurance Policy Covers

If you get involved in an accident, your policy provider will partially pay for the resulting repair expenses for your rental car. That is, your liability coverage will pay for damage costs up to the specified coverage limit, including injuries to you and other persons and damages caused to property.  

On the other hand, your collision coverage will compensate for any damage mainly caused by the collision. This coverage deprives the rental agency of the right to pursue charges against you in events of road collisions. And lastly, comprehensive coverage in your primary auto insurance will pay for non-accident-related damages on the rental car, including theft and vandalism, hitting an animal, falling objects, hail, floods, and fire.

But still, in most cases, your collision and comprehensive coverages may fail to provide coverage for damages caused to the rental car. The rental agency may renounce some of these costs, including administrative costs, loss of use, and loss of value. Additionally, suppose your rental agreement (the document you signed during car hire) covers ‘third party property damage.’ In that case, the car hire company can help you to file a compensation claim for damages caused to other cars and property during the accident. But to benefit from this insurance cover, you must pay more when hiring the car.

When Does Auto Insurance Cover Rental Car Damages? 

Your auto insurance policy can only cover rental cars if a personal car is under rental reimbursement. But it covers your rental car if your primary car is under repairs due to a covered claim (like a road accident). If your usual car suffers an uncovered claim such as a mechanical issue (or breaks down), your auto insurance may fail to provide cover for the rental car.

Although you may rely on a personal car most of the time, it’s of utmost importance to add rental reimbursement to your primary auto policy. You might spend several weeks waiting for your mechanic to restore your car after an accident or during maintenance. That means you’re going to need a replacement car from a rental agency. During these times, many car owners get surprised when they realize their primary auto insurance does not extend coverage for rental cars unless they have rental reimbursement.

Rental Reimbursement

Rental reimbursement is an additional option in an auto insurance policy, costing extra nominal fees. It’s provided by almost all auto insurance agencies, although it gets bypassed often by shoppers looking for the lowest possible premium costs. If the other party is at fault, their insurance often compensates damages for rental cars. You can bypass the long waiting hours of claim processing by using your rental reimbursement, then letting your insurer deal with the at-fault insurance company.

 On the other hand, your rental reimbursement will still cover damages if you’re an at-fault driver. Alongside comprehensive and collision coverages for personal cars, most insurers will offer the rental reimbursement as an add-on coverage. That means it’s often not included as a standard cover. These insurance options are intended to help car owners evade out-of-pocket expenses during road accidents.

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