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Does Your Auto Insurance Cover Rental Cars or Do You Need a Separate Policy?

General wisdom usually says, “Always get the insurance,” when renting cars. And indeed, if you’re ever involved in an accident in a rental car, having the company’s insurance makes the aftermath (assuming there are no injuries) as simple as taking the car back, filling out a form and walking away. However, some people see this as an unnecessary expense. For them, when you compare auto insurance, it’s a good idea to ask, “Does your auto insurance cover rental cars or do you need a separate policy?”

Maybe You Do—Maybe You Don’t

Some auto insurance policies extend coverage to whatever car you happen to be driving at the time of an incident. Others do not. To be certain, you’ll need to examine your policy to determine the types of coverage you have in place. If your policy specifically states rental cars are covered, you’re good to go—as long as all of the coverage parameters are met. These can vary; consult your policy for the specific language regarding rental cars.

On the Other Hand…

Let’s say your auto insurance policy does cover rentals. You still might want to go with rental car insurance from the company. If something happens to the rental car and it’s on your insurance, the occurrence will go down as a claim—which could potentially lead to an increase in your premium. Multiplied over 12 moths (or longer), that increase could easily add up to be more than the rental car company’s fee for insuring the car for the short amount of time it is in your possession.

Credit Card Coverage?

Yes, some credit card companies do provide rental car insurance, as long as you rent the car using their card. However, that coverage comes with a number of caveats, each of which must be met to ensure your protection. Further, that coverage can be only supplemental in nature. In those instances, the credit card company will only pick up whatever your regular insurance doesn’t cover. In other words, your primary policy is still the one on the line. The credit card comes into play if your policy doesn’t cover everything. The only way to be sure is to read the contract to see what protections you’re afforded and under what circumstances.

Rental Expense Coverage

When you review your policy for information pertaining to rentals, this category might catch your eye. However, Rental Expense Coverage only applies if you need to rent a car due to the loss of use of your primary vehicle. In other words, your policy will pay for a rental for you to use while your car is being repaired after an accident.

The Bottom Line

While it might feel like the rental car company is upselling you, getting their insurance is usually a good idea. If something happens to the rental car and you bought the insurance you can pretty much walk away from it. If you don’t, you’re going to have to work through the consequences on your own. So ultimately, it comes down to how much your time is worth. Speaking of your time, CoverHound can save you lots of it (and money too) when you compare auto insurance. Try it today.

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