What Does My Auto Insurance Policy Cover When I Rent a Car?

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An important decision when renting a car is whether to purchase insurance from the rental company. In many cases, coverage will extend from your existing auto policy, which can save you the expense of having to purchase additional coverage. Coverage may also extend from other types of insurance policies that you already carry.

Know Your Policy

  • Your insurance policy should indicate which coverages extend to a rental car and in what amounts. However, insurance policies are infamous for their confusing language and "gray areas," which allow room for interpretation. It's a good idea to contact your agent for clarification. For a higher level of expert advice, call or email your company's customer service department to see if you can get in touch with an underwriter. An underwriter is an insurance company employee who evaluates risk and is usually more familiar with policy language than your agent.

Liability Coverage

  • Virtually all auto insurance policies provide liability coverage, also known as third-party coverage because it pays for damages and injuries sustained by others as a result of your negligence. To rent a car, you will need to show proof of liability coverage before you can leave with the vehicle. In nearly all cases, your present liability coverage will transfer to the rental, so you won't have to buy the rental company's coverage. However, if you carry low liability limits, you can purchase supplemental coverage from the rental company.

Physical Damage Coverage

  • Physical damage coverage pays for damages to your own vehicle and includes collision, which pays for accident-related damages, and comprehensive, which pays for "all other" losses like windshield chips and vehicle theft. Physical damage also normally transfers to a rental vehicle. However, you are not required to carry physical damage on your own auto policy unless it contains a financed vehicle. You'll want to be sure that you have physical damage coverage on your policy. If you don't, you may need to purchase it from the rental company.

Personal Effects

  • If you're traveling on vacation or for business, you may be carrying personal property like clothes or even cash in your car. In general, loss of personal property is not covered under an auto policy. However, it is often covered under a homeowners policy, so you should check yours before buying the coverage from the rental company. If you're using a credit card to rent the vehicle, it may provide personal property coverage (as well as other coverages) at little or no cost, but you'll need to check with your card issuer to be sure.

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