When you rent a car, one of the first questions you’re likely to face at the rental counter is whether you want to purchase insurance coverage. But before you pay extra for rental car insurance, it’s important to understand how your personal auto insurance policy might already have you covered.

What Your Auto Insurance May Cover
In most cases, your existing auto insurance policy extends to rental vehicles. Here’s how:

Liability Coverage
If your policy includes liability insurance, it will typically cover damage or injury you cause to other people or property while driving a rental car. However, keep in mind that your liability limits will be the same as those on your personal policy.

Collision and Comprehensive Coverage
If you have collision or comprehensive coverage on your personal vehicle, it may also apply to a rental car. This means that damage to the rental car from an accident, theft, or natural disaster may be covered—minus your deductible.

Medical Payments or Personal Injury Protection (PIP)
Your medical payments coverage or PIP can also extend to a rental car, helping cover medical expenses for you and your passengers in the event of an accident.

Gaps to Watch Out For
While your auto insurance may cover many scenarios, there are some potential gaps:

Loss of Use
Rental car companies may charge for the income lost while the car is being repaired. Many personal policies don’t cover this, but rental car insurance usually does.

Diminished Value
If a rental car loses resale value after an accident, the rental company may charge for that depreciation. This is rarely covered by personal auto insurance.

Higher Deductibles
If you make a claim on your auto policy for a rental car incident, you’ll still need to pay your deductible. This may make rental car insurance appealing if it has a lower or no deductible.

Credit Card Rental Coverage
Many credit cards offer secondary rental car coverage, which can supplement your auto insurance. Typically, this covers damage to the rental car but not liability or medical expenses. Be sure to check your credit card terms before relying on this option.

When to Consider Rental Car Insurance
While your personal policy may suffice in many situations, you might want to purchase rental car insurance if:

You don’t have comprehensive or collision coverage.
You’re renting an expensive or exotic vehicle that exceeds your policy limits.
You want to avoid potential claims on your personal auto policy.

Bottom Line
Before renting a car, review your auto insurance policy and credit card benefits to understand your coverage. Being informed can help you make the right decision at the rental counter—and save you money.

Need Help Understanding Your Coverage?
If you’re unsure about your auto insurance policy, reach out to me or your agent. They can clarify what’s included and recommend the best options for your needs.

About the Author:

David Dandaneau is a insurance agent that covers the insurance and financial services industry. He is known for his insightful analysis and comprehensive coverage of market trends and regulatory developments.