Can I Use My Own Auto Insurance for a Rental Car?
Drivers have the option of using their personal auto insurance plans or purchasing coverage through rental companies when renting cars. By using their own insurance policies, drivers are able to lower the total costs of renting vehicles. However, there are financial consequences for drivers if their personal auto plans are responsible for paying claims resulting from accidents.
Other People Are Reading
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Benefits
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Individuals using their personal auto insurance plans to cover car rentals are saving money. According to Yahoo, purchasing auto coverage from rental companies can add an additional $40 per day to the total costs. In fact, depending on the renters' geographical regions, purchasing auto coverage from rental companies could double the total costs of car rentals.
Types of Insurance Sold By Rental Car Companies
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According to Insurance Information Institute, rental car companies sell several types of insurance coverage. Collision Damage Waivers (CDW), commonly referred to as Loss Damage Waivers (LDW) are technically not insurance products; they relieve renters from financial responsibility due to damaged or stolen cars as well as compensating rental companies for loss incomes while the cars are being fixed. These waivers typically cost between $9 to $19 per day. Other insurance coverages include liability ($7 to $14 a day; covers third party medical expenses and car damages), Personal Effects Coverage ($1 to $2 a day; insurance for theft of items from cars) and Personal Accident Insurance ($3 a day; covers medical expenses of renters and their passengers).
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Considerations
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Before purchasing auto insurance from the rental company, a driver may want to examine their insurance policy to check what is covered to prevent double coverage. An individual may be wasting money purchasing insurance they already have. Besides their own auto policies, renters may also want to check with their credit card companies as some offer different types of rental car coverages as part of their benefit packages.
Misconceptions
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Depending on the coverage amounts and what incidents are covered, personal auto plans may not be adequate enough to cover rentals. For example, if drivers only have liability coverage, which pays for damages caused to other properties and injured parties' medical expenses, that will not be enough for rental car companies which generally wants their cars protected as well. Drivers can purchase CDW/LDW coverages to satisfy this requirement.
Warning
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The downside of using personal auto insurance to cover rental vehicles is what happens when accidents occur. Drivers are responsible for paying deductibles as if the cars were their own. They will likely have to pay increased premiums as a result. By purchasing rental insurance instead, their personal auto plans remain intact while any financial liabilities are transferred to the rental companies.
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References
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