Does My Liability Car Insurance Cover Rental Cars?

If you've ever rented a vehicle, you know the company offers you several types of insurance when signing the contract. But if you have your own auto insurance policy, you may be wondering if you're already covered when renting a car, and how much additional coverage you really need. One of the most critical components of coverage to consider is your liability insurance and how it might apply to rental cars.

Fortunately, a local independent insurance agent can help answer these questions for you and get you set up with the right car insurance policy. They'll ensure you're protected from a liability standpoint and in any other areas of concern, whether you're driving your own vehicle or renting one. But first, here's a closer examination of if, when, and how your personal auto liability insurance can protect a rental car.

Table of Contents

• Does My Existing Auto Liability Insurance Cover a Rental Car?
• How Does My Liability Insurance Cover a Rental Car?
• How Much Do I Have to Pay If My Liability Insurance Doesn't Fully Cover the Rental Car?
• When Would I Need a Loss Damage Waiver from the Rental Car Company?
• Why Work with an Independent Insurance Agent?
  

Does My Existing Auto Liability Insurance Cover a Rental Car?

The liability insurance under your personal car insurance policy will extend to cover a rental car, but only the damage that you do with your rental car, not the damage that you do to the rental car. So, if you get in an accident with another vehicle while driving a rental car, your existing liability insurance can cover the costs of the damage to the other vehicle and the other driver's medical bills and those of their passengers if they're injured, but it won't cover any damage that you do to the rental car. 

• Liability insurance: This provides coverage for any property damage or bodily injuries you cause to a third party if you're responsible for an accident. Liability insurance is the minimum insurance required by most states for car insurance, so many drivers already have this insurance.

In many instances, your existing auto liability insurance should extend to a rental vehicle. However, you might still choose to add the liability insurance offered by the rental car company for a few reasons. If your personal auto policy's liability coverage has a high deductible or a low coverage limit, or you already have existing claims on your policy, you might not want to go through your existing car insurance when driving a rental car. 

You might also want to get the rental company's insurance anyway, to avoid the possibility of your own car insurance rates increasing if there's an incident while renting the vehicle. Additionally, if you do not have a current auto insurance policy, you will be required to purchase this coverage before you can rent a car.

How Does My Liability Insurance Cover a Rental Car?

If you already have liability insurance, hitting another vehicle, even in a rental car, will work much like getting in an accident in your everyday vehicle. Your liability insurance can pay for property damage you caused to the other vehicle or anything else that you hit. It can also cover medical expenses to the other driver and their passengers for any bodily injuries you caused by hitting them.

Say you're in an accident in a rental car with a third party and you're at fault. You'd open a claim with your car insurance company, and it would be handled like any other incident.

However, your liability car insurance will not pay for the damage you do to the rental car. You'd need to go through collision coverage in case of a collision with another vehicle or a stationary object. However, if the vehicle was damaged by another, non-collision event, such as vandalism or a flood, you'd need comprehensive coverage.

How Much Do I Have to Pay If My Liability Insurance Doesn't Fully Cover the Rental Car?

If you have enough liability insurance, any damage or injuries you cause to another vehicle or person while using a rental vehicle can be fully covered by your auto policy. However, if your existing policy's limits aren't high enough, you may want to get supplemental coverage from the rental car company. Otherwise, you'd be responsible for paying the rest of the amount owed for third-party property damage and bodily injury once you've exhausted the limits of your personal auto policy.

When Would I Need a Loss Damage Waiver from the Rental Car Company?

To cover any physical damage you do to a rental car, you'll need to purchase a loss damage waiver, which is offered by rental companies. This can cost between $20 and $30 a day and may be well worth it. 

• Loss damage waiver: This states that the car rental company will not hold you responsible for damage to the car as long as you have not used it in a way that violates the terms of your rental agreement (e.g., by driving recklessly, off-road, or while intoxicated). 

If your existing car insurance policy includes collision coverage and comprehensive coverage, you already have protection for the rental vehicle against physical damage. However, you can still risk a large financial loss because of your policy's deductible and fees added by the rental car company for loss of use, diminished value, and administrative costs.

So, should you purchase a loss damage waiver? If you don't carry collision or other than collision coverage, it's highly recommended. You might also want to get the waiver if you don't want to go through your own auto policy in case of an incident. This could lead to increased premium rates going forward.

Why Work with an Independent Insurance Agent?

When it comes to finding the right protection for your personal vehicle and any rental vehicles you may need, no one's better equipped to help than a local independent insurance agent. These agents have access to multiple car insurance companies near you and can shop and compare policies and rates to find you the best deal. And down the road, your agent can help update your coverage when necessary and even file car insurance claims for you.