Does My Car Insurance Cover Rental Cars?

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Before renting a car many of us want to know if our auto insurance covers rental cars. Should it be during our short-term trip, long-term family vacation or any other travel. I will try to answer this question for you. For the sake of simplicity, we are going to talk about car types, locations, and liability. We will also discuss what you should do if your existing insurance policy doesn’t apply to the vehicle you want to rent.

Using your private car insurance for similar or different vehicles

If you already have an insurance then your policy might provide same coverage to your rental car which is of similar type as your own. Meaning that, if you have a sedan and you rent a sedan, your insurance will extend on that car too. Moreover, it might apply to most other regular vehicles.

Possible scenarios of applying your insurance to a rental car

If you want to go on a short trip with a sports car or rent a pickup truck for similar purpose, that might as well be covered by your existing insurance (which covers your private sedan). However, for other categories of vehicles it is more likely that restrictions apply. Imagine you want to rent a motorcycle, or something much bigger such as a RV. In such cases you will need to check carefully what alternative insurance packages you will need. On the other hand, insurances for other types of vehicles won’t be valid for a sedan as it would be a different category.

How to proceed?

Make sure to call your insurance company and ask whether the rental vehicle you are interested in is covered by your insurance policy. The coverage might differ from one company to another. But in general, if you have an insurance coverage for a regular car, it should extend to a regular rental car as well.

Validity of your insurance: home country vs. abroad

Another important factor that should be considered is the location. It’s important to know where you will be renting your car. If you are from a European country it is likely that your insurance will work within the European Union. If you are from the US then your insurance might extend to Canada. But if you are going from Europe to the US and have a European insurance policy, most likely that will not cover you during your trip. In such cases, the best is to check the information with your insurance company. You can verify whether the coverage is valid in the location of your travel.

Three insurances that are quite important for your trip include: liability, property, and loss of use.

Liability insurance

It will cover you in case you accidentally injure someone, or damage somebody’s property while driving. All insurance policies have limits, so make sure you know what your coverage limits are. Those would apply to a rental vehicle in the same way as they would apply to your own.

Property insurance

It will cover you for the damages to the rental car itself. If you get into an accident and your vehicle is damaged, your policy will be used in the same way as in case of your own car. But imagine your car is old, let’s say it’s worth US$ 7K and you rent a car which costs US$ 21K, then in case of accident you might get into trouble as your existing insurance might not be able to cover the repair costs of the rental car that is three times more expensive than your own, unless you have purchased a full coverage. This is where you might face some problems. So, make sure to buy supplementary insurance.

Loss of use

A situation where the rental company can’t rent out its car because you damaged it in an accident. In such instances car rental companies are asking for reimbursement of the income that the car would have generated had it not been in a garage for repairs. Often employees at the rental counter will highlight that your insurance is unlikely to cover the loss of use. They will try to convince you to buy their expensive insurance. If you are not sure whether your insurance covers such losses, they will use it against you. And do their best to convince you to purchase their insurance. However, what you should know is that your regular insurance policy may cover loss of use under the liability part of your policy. The best is to check that with your insurance provider prior to your travel.

Prepare your insurances in advance

If you find out that your insurance policy doesn’t have the right coverage and you are already close to picking up your vehicle, you will have no choice but to buy an additional insurance at the counter. However, you could avoid that by purchasing all necessary insurances online, ahead of your trip.

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