Rental Car Insurance Coverage: Am I Covered?

Millions of people each year obtain a rental vehicle for various reasons including: a business trip, to take a vacation, or for alternate transportation when their vehicle is being repaired.  When renting a car, one of the most important things to ensure is that your insurance transfers to the vehicle that you rent. To make sure that it does, you can check a few places including your actual policy document, your agent or the insurance company directly.

When you contact your insurance company to find out if your policy will cover a temporary rental vehicle, most people make a few mistakes, but by asking the following questions, you can avoid some of the possible issues. First, directly ask if your insurance policy will cover a rental vehicle, and if so, how long will it cover the rented vehicle? Most insurance companies will cover rentals only for a predefined maximum period of time, usually around 30 days. Second, are there limitations to the type of vehicle that you can rent? Some policies have exclusions for luxury, exotic or custom vehicles. Third, check to see who is covered in the rental vehicle. Find out if everyone listed on your policy is covered if they operate the rental vehicle, or if it only covers the named insured, this is important because some policies limit who is covered. Fourth, be sure to write down to whom you spoke and what they said to do if an accident happens. You do not want to file a claim and later find out that the information that you received was not correct. Fifth, if you have collision coverage, ask them if you will be liable for a deductible in the event that you need to file a claim. Some insurance companies will, and others will not, charge a deductible for this type of loss.

Did the credit card that you rented the vehicle with provide additional coverage? A number of cards provide free damage coverage for vehicles rented up to a maximum of 30 days when using their card.  Check with your credit card company to see if it is offered. If it is, be sure to read the fine print because each company has different types and requirements for the coverage. Some will only cover you for the amount not covered by your auto insurance policy, i.e. a secondary coverage, while others will cover you as a primary and not require any concurrent coverage.

How do you know that you are covered? Most, but not all policies will cover you when you rent a vehicle. The policy typically will not extend coverage to friends or relatives unless they are listed on the policy. To ensure that your policy will cover you while using a rental vehicle, check your policy or call your agent or insurance company directly. If you call your insurance company, be sure to record who you spoke to and what department or extension they are at since some employees do interpret policies incorrectly and if they are wrong and something happens, you want to be sure that you record who gave you the erroneous information.

Mistakes to avoid. When you rent a vehicle, you coverage will typically only provide temporary coverage for a rental vehicle. It is usually defined as a rental up to 30 days, once you have rented a vehicle over 30 days, an insurance company does not usually consider it a temporary vehicle and it must be added onto the policy for coverage to continue. What this means that that your policy will cover you with the broadest amount of coverage listed on the policy for up to 30 days. Therefore if you have a vehicle listed on the policy where you purchased liability and property damage, the insurance company will transfer liability and property damage coverage only. Therefore, make sure you obtain some type of insurance that will cover any damages that you may cause to the vehicle whether through the rental companies damage waiver or by using a credit card that provides (collision) damage coverage.

If you have further questions, be sure to check with your insurance company, they can provide the best information regarding what your insurance will or will not cover. Be sure check because the last thing you want to do is have an accident without valid insurance coverage.