Rental Car Insurance Explained

Will your personal insurance policy pay for accident-related damages or injuries?

Renting a car invites the question, “Do I want to pay the extra cost of insurance coverage for the rental?” The options for rental car insurance typically include the following:

Collision damage waiver. Under this provision, the rental car company waives its right to pursue you for any damages to the car. The waiver covers theft or damage in the event of an auto accident. If your personal automobile insurance policy does not include comprehensive coverage or collision coverage, you should consider purchasing a collision damage waiver. It costs between $9 and $19 per day.

Liability coverage. The rental company will probably offer supplemental liability insurance coverage for around $15 a day for $1 million in coverage. You don’t need it if your personal auto insurance policy provides enough liability coverage to protect you from potential lawsuits.

Personal accident insurance. This insurance costs about $5 a day. It covers medical bills for you and your passengers if you become injured in an accident. You don’t need it if your automobile insurance policy provides health insurance coverage or personal injury protection.

Personal effects coverage. This covers any of your personal property stolen from the rental car. But your homeowners or renters policy likely provides the same protection.

Ask the rental company about any administrative fees that may be added to the quoted price if you purchase coverage from them.

Your own car insurance policy usually covers you if you cause an injury or property damage while driving a rental car. But if you decide not to purchase coverage from the rental company, keep the following in mind:

• If the car you rent is damaged or stolen and you need to file a claim, your auto insurance premium will be affected in the same way as it would if the incident had involved your personal vehicle.
• The rental car agency may have a policy of charging a deposit on your debit card and then refunding it when you return the vehicle if it is returned in good condition.
• Your personal automobile policy will not cover vehicles like moving vans. If you are renting a truck to move, you must buy insurance from the truck company.
• If you are traveling internationally and will be renting a car abroad, your automobile insurance is less likely to cover you. Contact your insurance company and find out what the terms of the policy are for renting a car outside the United States.

You don’t want to pay for insurance that you don’t need. But you don’t want to be underinsured either. Check with your insurance company about whether purchasing rental car insurance makes sense for you.

When Rental Car Insurance Is a Good Idea

If any of the following situations applies to you, getting rental car insurance may be a good idea:

• Your policy lacks comprehensive and collision coverage.
• You are covered only under a commercial car insurance policy.
• You don’t want to risk paying a high deductible.
• You are traveling abroad and your policy doesn’t cover you.

If you are not currently insured, you must buy liability coverage from the rental company. But it isn’t legally required if you do have automobile coverage.

If you or a loved one has been injured in a Colorado accident involving a rental vehicle, contact personal injury attorney Dan Rosen at (303) 454-8000 or (800) ROSEN-911 to schedule your free initial consultation to discuss the details of your case.