It’s usually a standard question at a rental car company counter: “Do you need rental car insurance?” Considering the rental car company has insurance on their car, you have insurance on your personal car and you may also have rental coverage available through your credit card, what should you do? This type of “insurance,” technically a waiver, may help to cover costs should the car become damaged or incapacitated during your rental time. Here’s how to sort out the specifics.
What is rental car insurance coverage?
Typically, coverage through a rental car company falls into five categories:
Collision damage waiver (CDW) or Loss damage waiver (LDW): Releases you from damages that occur to the rental car, including vandalism and theft.
Liability: Provides coverage for damages or injuries you may cause with the rented vehicle.
Personal accident insurance (PAI): Protects you and your passengers should injuries occur while driving the rental car.
Personal effects coverage (PEC): Covers personal items that may be stolen from the rented vehicle.
Roadside assistance: Covers emergency roadside expenses, lost keys and travel assistance.
Do I need rental car insurance?
Many personal vehicle insurance policies already include some sort of car rental insurance coverage — so if you purchase a rental car policy, you’re paying extra when you may not have to. Let your State Farm Agent Regina Talbot know the reason for the rental so she can help assess how coverage from your personal vehicle policy might apply.
How much Liability, Comprehensive and Collision coverage do I have on my personal vehicle? The coverage you have on your personal vehicle may also extend to your rental car.
If my car insurance has high physical damage coverage deductibles, are rental cars adequately covered? Sometimes they’re not.
If I have roadside service, are towing and administrative fees also extended to the rental car? The answer is usually no.
If items are stolen from the rental car, does homeowners or renters insurance cover the loss? This is sometimes referred to as off-premises coverage.
Does my personal auto policy cover loss of income coverage? If the vehicle becomes damaged during your rental time and repairs are needed, the company may charge you for the vehicle’s potential earnings while it’s being repaired.
Does my credit card cover rental car insurance?
If you pay for a rental car with a major credit card, the card issuer may offer secondary car rental insurance at no charge. In general, this coverage will be used after your personal auto insurance policy is used. Keep in mind that credit card coverage varies from card to card and the institutions which issue the cards. This coverage typically only helps with additional expenses such as reimbursing your insurance deductible. Exotic, expensive or larger vehicles may not be covered by credit cards.
Refer to your card’s website for information about available rental car coverage or call the number on the back of the card to inquire.
Do I need international car rental insurance when abroad?
Contact your agent and credit card company well in advance of your trip. Paying for international coverage might help if you have an accident or the vehicle is stolen while traveling abroad.
Renting for work or play?
Coverage extensions from your existing policy or your credit card may not apply if you’re renting a car for business. In that case, review the coverage options through your employer.
We encourage you to learn more and discuss your unique needs with State Farm Agent Regina Talbot at 626-357-3401.
