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Do I need insurance to rent a car?
When renting a car,
you need insurance. If you have adequate insurance on your own car,
including collision and comprehensive, this may be enough.
Before you rent a car:
- Contact your insurance company.
Find out how much coverage you have on your own car. In most cases, the
coverage and deductibles you have on your personal auto policy would
apply to a rental car, providing it's used for pleasure and not
business. If you don't have comprehensive and collision coverage on
your own car, you will not be covered if your rental car is stolen or
if it is damaged in an accident.
- Call your credit card company.
Find out what insurance your card provides. Levels of coverage vary.
If you don't have auto insurance, you have two choices: you can buy
coverage at the car rental counter; or you can purchase a a non-owner
auto liability insurance policy .
Rental
car counter insurance
Rental car counter insurance can provide the following
coverage:
- Collision Damage Waiver (CDW).
Sometimes called a Loss Damage Waiver (LDW), this coverage relieves you
of financial responsibility if your rental car is damaged or stolen.
The CDW may be void, however, if you cause an accident by speeding,
driving on unpaved roads or driving while intoxicated. This coverage
generally costs between $9 and $19 a day. If you have comprehensive and
collision on your own car, you may not need to purchase this coverage.
- Liability Insurance.
This provides excess liability coverage of up to $1 million for the
time you rent a car. Rental companies are required by law to provide
the minimum level of liability insurance required by your state.
Generally, this does not offer enough protection in a serious accident.
If you have adequate liability coverage on your car or an umbrella
policy on your home/auto, you may consider forgoing this additional
insurance. It generally costs about $9 to $14 a day. If you don't own a
car, and rent cars often, consider purchasing a non-owner liability
policy. This costs approximately $200 - $300 per year. Frequent car
renters sometimes find this more cost-effective than constantly paying
for the extra liability coverage.
- Personal Accident Insurance.
This provides coverage to you and your passengers for medical/ambulance
bills. This type of insurance, usually costs about $1 to $5 per day,
but may be unnecessary if you are covered by health insurance or have
adequate medical coverage under your auto policy.
- Personal Effects Coverage.
This provides coverage for the theft of personal items in your car.
However, if you have homeowners or renters insurance, you may be
covered for items stolen from the car, minus your deductible. You need
to have receipts or other proof of ownership. This type of insurance
usually costs about $1 to $4 per day.
Some rental car companies combine personal accident and personal
effects coverage together as one type of insurance, while others sell
it individually.
The cost of insurance at the rental car counter will vary depending on
the rental car company, state, and location of the dealer and the type
of car you rent.
Some rental car companies may check your credit and driving history and
may deny coverage. Check with the rental car company to find out its
policy.
Non-owned auto liability insurance
Instead of buying liability coverage from the car
rental company each time you rent a car, you can purchase a non-owner
auto liability insurance policy from an insurance company for about
$300 a year which might be cheaper if you rent frequently.
In addition, if you're thinking of buying an umbrella liability policy,
a non-owner auto policy may meet the underlying auto insurance policy
requirements. Umbrella liability insurance provides high limits of
liability coverage above basic policies. Most insurers will not issue
an umbrella liability policy unless the basic policies meet certain
dollar limits of coverage.
A non-owned auto insurance policy covers you for damage you may cause
to some else’s car and liability for injuries to its occupants, or to
pedestrian, in the event of an accident. The policy will also provide
medical payments coverage for you and your passengers, and
under-insured and uninsured coverage. This pays for the cost of an
accident involving a hit-and-run driver or a driver who has little or
no insurance.
However, non-owned auto insurance does not provide collision coverage.
Collision coverage pays for damage to the car you’re driving if you
crash into another car or object or the car rolls over. You have to buy
this from the car rental company. However, some credit cards provide
collision coverage if the rental car is paid for with the card—so check
with your credit card company first.
Note: If
you're renting a car abroad, you may need an international drivers
license.
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