Rental Cars and Auto Insurance: What You Need to Know

If you’re planning on traveling or going on a vacation soon, you may be looking into getting a rental car while you’re away from home. 

This can be a great option to get around easier, and can often be cheaper than relying on rideshare services. However, you may be wondering how your auto insurance extends to rented vehicles and what other insurance options you have. 

At Berry Insurance, we’re used to answering this question (and many others) regarding personal auto policies. In this article we’ll explain how your personal auto policy covers rented vehicles, as well as what insurance options are offered through rental car companies. 

Does auto insurance cover rental cars? 

The short answer: yes. In most cases your existing auto policy will extend each of its coverages to you and your rented vehicle. 

So, you will not necessarily have to purchase additional rental car insurance if you already have a proper auto insurance policy, unless you want overlapping protection. 

However, it’s important to know that your auto insurance policy limits will still be applied to the rented vehicle as well, meaning the insurance provider will not pay out more than your coverage limits for any claims against your rented vehicle. 

Before you rent a car, speak to your insurance agent or provider to know exactly how they cover rental cars, as some insurers may have limitations on how much coverage long-term rentals can receive. 

What is rental car insurance?

Not to be confused with rental reimbursement coverage, rental car insurance is a separate policy coverage offered through a car rental company that would offer protections for the rented vehicle. This coverage will typically include:

• Liability coverage: This covers you for any medical bills or damage to another person’s property if you cause an accident while driving a rented vehicle. 
• Loss/collision damage waiver: A collision or loss-damage waiver protects you in the event of damages that occur to the rental car, including vandalism and theft. 
• Personal accident insurance: This offers coverage against injuries to you and your passengers while driving a rented vehicle. 
• Personal effects coverage: Covers your personal property if they are stolen or damaged from your rented vehicle. 

Do I need rental car coverage? 

In most cases, you will not need to pay for separate rental car coverage. If you have an existing auto insurance policy, the policies coverage will extend to rented vehicles. 

If you already have comprehensive, collision, liability, and medical payments/personal injury protection coverages on your auto policy, then paying for separate rental car coverage would likely be unnecessary. Your personal property in the rented vehicle would also be covered if you have a homeowners, renters, or condo insurance policy. 

When should I get rental car coverage?

There are still some instances where having a rental car policy may be beneficial to you, even if you already have an auto insurance policy. Examples include: 

• You want to avoid claims on your auto policy 
• You don’t have collision or comprehensive coverage on your auto policy
• You’re traveling somewhere that your policy does not extend to
• You have high deductibles on your auto policy
• You have low liability limits on your policy
• You are renting a moving truck or vehicle (auto won’t cover moving rentals) 

Also, while you don’t need an auto insurance policy to be eligible to rent a car, you would be required to pay for rental car coverage through the rental company. 

Rent with peace of mind 

Wherever you plan to rent your car, you can travel freely knowing that your auto insurance will have you and your rental car covered. 

While rented vehicles are covered by your policy, there are still some areas drivers are surprised to learn are not protected through their auto policy. Take a look at our guide to everything you should know that doesn’t receive coverage on your auto policy: What is Not Covered by Car Insurance?