Why You Need Insurance For Your Rental Car

August 6, 2021

While on vacation, people tend to avoid buying insurance for their rental car. This can be because some people do not think to get it or because they want to avoid extra costs while on vacation. However, not getting rental car insurance is a bad idea, and it can affect you in the long run. 

The risk of driving without insurance can be much more costly to you if you get into an accident, and it also carries legal repercussions. Here are some of the reasons you need insurance for your rental car.

It Is Illegal To Drive Without Insurance

The first and most obvious reason why you need insurance for your rental vehicle is that it is literally illegal to travel without it in all but two of the 50 states. Repercussions for driving without insurance include jail time and fines of up to $5,000. Some states have specific minimums that must be met, while others simply let you prove your fiscal responsibility.

In some cases, you could have your car impounded if you drive without insurance.

As insurance is usually tied to the vehicle and not the driver, you could face major fines if you are insured, but drive an uninsured vehicle. If you are caught driving without insurance, you could also garner negative points on your driving record, have your license or registration suspended, or face mandatory high-risk auto insurance premiums.

These legal restrictions still apply even when you are driving a rental vehicle.

Your Own Insurance May Not Cover Rental Vehicles

Now you might be wondering, “Does not my insurance cover rental vehicles?” While some policies will cover rental vehicles, others will not.

Make sure you check the details of your policy before you spring for extra rental coverage. As a general rule, if you have full coverage that includes comprehensive and liability coverage, a rental car should also be covered. 

This is especially true if the rental is of a similar value to your personal car. If you are renting a more expensive car, you may want extra coverage.

Some personal policies allow you to add a rental car coverage waiver or personal effects coverage that will reimburse you for items stolen from a rental car.

If you only have the minimum liability coverage required by your state, you will likely need to purchase rental vehicle coverage along with your rental car.

The rental car provider will often have rental car insurance you can purchase, but it might be better to look into what your own provider offers first. You can usually get discounts by bundling insurance or going through your current insurer.

You can also use online rate comparison tools to compare rental insurance rates. Try to do your research before going to pick up your rental vehicle.

Rental Vehicles Provide Safety During Pandemic Travel

With all this information about insurance for rental vehicles, you may be wondering whether renting is even worth it if you need to get an extra insurance policy. Some people may prefer to just use their own cars, which are automatically covered by their own insurance.

However, using your own car not only increases your mileage and risk to your own vehicle, but it can also be impossible for those flying to their locations. Rental cars provide an easy way for people to socially distance and travel during the pandemic and are safer than public transportation.

You could always use your own vehicle, but that could add many miles to it and be a risk to your own property if you are traveling in unfamiliar weather and road conditions.

Rental vehicles can provide a lot of safety to you and your family while driving, and it is not that difficult to get rental car coverage to keep you safe in the event of an emergency.

Rental vehicles often will have more up-to-date maintenance and be more ready for the weather and climate in the area you are using them in. However, because they may handle differently than your average car, it is crucial to have proper coverage to handle damages or injuries in the event of an accident.

Shop For Rental Car Insurance Before You Rent

The last thing you want is to have to decide between buying rental insurance while you are buying a car. Often, rental companies put a lot of pressure on buyers to get their collision damage waiver, and it can be overwhelming in the moment to know what your best option is.

There are benefits to using a rental company’s waiver or policy. As a general rule, the collision damage waiver or loss damage waiver waives the company’s rights to demand compensation for any damage that occurs to the rental car while it’s in your possession.

There are a few exceptions to this, such as if the damage was caused by gross negligence, but in general, you can just drop off the car as is when you’re done regardless of how damaged it is by the end of your rental. This means that the waiver is often the easiest and least complicated way to be absolved of any car repairs.

However, these waivers are often quite expensive when compared to rental riders that you can add to your traditional insurance policy. And you will usually have to pay your deductible and deal with rate increases if you do get into an accident with a rental car and have to make a claim.

Another option is to use credit card benefits, as some cards offer car rental collision coverage. Unfortunately, this coverage often serves as secondary or backup coverage to your primary insurance policy.

Finally, you can always get third-party rental insurance from an online insurer or travel agency. Both credit cards and car rental insurance require you to pay first and then file a claim for reimbursement later.

What To Do In A Rental Car Accident

If you do get into an accident, make sure you contact the police. They can take statements from witnesses and other drivers and record things like confessions. 

Make sure you do not admit any blame for the accident and ask the officers for written statements. Get the responding officers’ badge numbers and names as well as the station phone number.

With a rental car, you want to be careful, especially if you didn’t get the rental company’s waiver, as they will often charge you for more than just the damages to the car. Because of this, you want to be especially careful about admitting fault.

Since rental company waivers only cover damage to the vehicle, you want to make sure that you have some kind of liability insurance to cover medical costs and damages to the other party.

If you feel you are being unjustly blamed for an accident in a rental car, seek out a qualified car accident attorney as soon as possible.

Deborah Goldberg researches and writes about travel safety and insurance for the auto insurance comparison site, AutoInsurance.org. She is passionate about consumer protection and legal transparency for travelers.

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Andi Perullo de Ledesma

I am Andi Perullo de Ledesma, a Chinese Medicine Doctor and Travel Photojournalist in Charlotte, NC. I am also wife to Lucas and mother to Joaquín. Follow us as we explore life and the world one beautiful adventure at a time.

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