Whether or not an auto policy will cover a rental car is one of the most common questions I hear. The truth is, that question can mean two different things, and often leads to follow-up questions.
1. Does my insurance coverage extend to a car I’m renting (like on a vacation)?
You’ll have to check with your specific policy to be absolutely certain, but in general the answer is yes. Your liability coverage should extend to a car you a renting. If you have Comprehensive and Collision coverage on your policy, that would likely extend as well at no additional cost.
2. Does my insurance policy pay the daily fee to rent a car?
This is a more complicated answer and really depends on the situation and what coverage you pay for on your policy.
If you’re going on vacation or renting a car because your car is having mechanical issues, your policy would not pay for the rental car.
If your car was damaged in an accident, by hail, or some other covered loss, then your policy would pay for the rental car as long as you have selected rental car coverage on your policy. That coverage can go by several different names depending on your insurance provider, so it may show up on your declarations page under one of the following names:
- Rental Car Reimbursement
- Loss of Use
- Additional Expense
Generally, that coverage has both a daily maximum limit and a per occurrence maximum limit. For example, your policy could cover a rental car for up to $50 per day, with a maximum limit of $1,500 for the entire claim. That adds up to $50 per day for up to 30 days. Some policies have only a maximum per occurrence limit without a daily cap, or some have no limits at all.
Most policies also have a weight or size limit for what rentals the policy will extend to. For example, many policies won’t cover a moving truck because of the gross vehicle weight limit. The exact limitations will vary by policy, so be sure to check yours before assuming you’ll have coverage.
If you aren’t sure what coverage or limits your policy provides, call your agent and have them go over the coverage with you.
Should I buy rental car insurance from the car rental company?
That depends on the coverage you have on your policy, and in some cases your credit card.
Some credit cards provide insurance coverage for a rental car when you pay for the rental car using that credit card. You can usually call the number on the back of the card to talk about what coverage your credit card company provides.
If you have Comprehensive and Collision coverage on your auto insurance policy, you may not need to purchase insurance from the car rental company. The risk of relying on your policy is that it generally won’t cover any additional expenses you may be charged if the rental car is damaged and not able to be rented to others while it’s being repaired. Sometimes the rental car company will charge you for the daily cost they are losing out on while they can’t rent a car that was damaged in your possession. Most auto policies won’t cover that cost, but a policy through the car rental company may.
Another benefit to buying coverage through the car rental company is that if you have a claim, it’s not on your policy. Since the claim wouldn’t be on your policy, you wouldn’t see a rate increase at the next renewal because of the claim.
At the end of the day, each person has to consider the costs and benefits of relying on their policy or buying coverage through the rental car company and decide what’s best for them.
Will my policy cover me if I rent a car in another country?
Most US auto policies only extend coverage in the United States, Canada and Puerto Rico. If you’re renting a car in another country, you should purchase coverage specific to that country. Every country has their own insurance requirements and laws, so even if your policy did extend you may not be meeting that country’s requirements and could end up in legal trouble.
If my car is totaled in a claim, when do I have to return the rental car that was provided?
Once your car has been deemed a total loss and your adjuster has notified you, the clock starts ticking. Your policy will only continue paying for the rental car for a limited amount of time. After that has expired, you’ll have to either pay out of pocket for the rental car or return it.
The exact time frame will depend on your insurance carrier. Each company has their own guidelines, ranging anywhere from 1 day to 1 week, or possibly longer. On average, you’ll only have a couple days to return the rental car before you have to pay out of pocket.
Luckily, it shouldn’t come as a complete surprise if your car is totaled. As long as you’ve been in regular contact with your adjuster, they should give you a heads-up that a total loss is a possibility. That way you can start your search for a new car before your car is officially deemed a total loss.
If you have any questions about insurance for rental cars, give us a call today. We’re always here to help and happy to answer any questions.
