Do Rental Cars Come With Insurance?
Insurance usually isn't included with your car rental unless you request it. You may be tempted to avoid requesting the insurance to keep the price of your car rental low. That may be a mistake if you don't have adequate coverage through other policies or a credit card. For example, coverage you already have may not pay costs associated with damaging another person's vehicle while driving a rented car.
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Insurance Policies
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Auto-, homeowners-, and renters insurance policies usually provide policyholders with some sort of coverage if they rent a car. People who pay for the cost of a car rental with a credit card also may have some coverage for damage that occurs to the car during the rental period. Nonetheless, it's important to understand how much coverage you have with your current insurers or card issuer before renting a car. Call your insurance and credit card companies for an explanation if you don't understand how much coverage you have.
Auto Insurance
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There are good reasons to request insurance coverage with your car rental even if you already have rental-car coverage through your current auto insurance policy. For example, CBS Moneywatch states that auto insurance policies often don't include coverage for a rental car company's temporary inability to rent a car that you've damaged. Therefore, you would have to pay for lost rental fees while the damaged car is being fixed if you didn't buy the rental car company's insurance when you first rented the car.
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Deductibles
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You may decide to rely on your own auto insurance to cover damage to a car you rent. However, auto insurance companies require policyholders to pay a deductible before they provide any funds to repair a damaged vehicle. A deductible is the money that policyholders pay upfront for vehicle repairs before insurers provide funds for repairs. A driver who has a $1,000 deductible would have to pay $1,000 out-of-pocket to repair damage to a rental car before the auto insurer would pay any remaining costs.
Credit Cards
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Any coverage that your credit card company provides for car rentals may be limited. For example, some card issuers cover damage to a rental car but not to other vehicles. That means you might have to pay to fix damage to another driver's car if you're in a collision. Your card issuer also may not cover injury or death claims made by other drivers that result from a collision you had with a rented vehicle. At the time of publication, rental car companies offer liability coverage that ranges from $7 to $14 per day. The coverage generally provides up to $1 million if you damage another person's car in an accident or injure others while driving a rented vehicle. Thus, you should read the coverage terms closely because you may have to pay a deductible.
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References
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