If you own a car, chances are your insurance policy will cover you when you rent a car on vacation. If you don't own a car, however, it's entirely possible you don't have an auto insurance policy. So what do you do if you're going on a trip and need to rent a car? In such a scenario, you can still rent a car without your own insurance. Want to know how it works? Below, we reveal the secrets to staying covered, no matter what happens.
Insurance From the Rental Company
The most common way of insuring yourself is to purchase coverage directly from the rental company. If you only need to rent for a short time, this may be the best and simplest option. Car rental companies always provide basic liability coverage and four additional insurance options for you to choose from.
Collision Damage Waiver
At its heart, a collision damage waiver covers only damage to your rental car. If you get into a wreck, a collision damage waiver won't cover other vehicle damages. It also won't cover injuries sustained by the other party.
Personal Effects Coverage
If you're concerned about having your laptop or a special memento stolen from your rental car, personal effects coverage can offer you some peace of mind. If your car is broken into while you're on your trip, you're entitled to reimbursement. Note, however, that many personal effects coverage policies don't cover a case of "loss by mysterious disappearance."
Personal Accident Insurance
This type of coverage focuses on you and your passengers, especially if one or more of you sustain injuries in an accident. This coverage is similar to PIP (personal injury protection) and MedPay. Both pay for your medical bills if you get injured. Although you can also utilize your health insurance for medical bills, be aware that you may have to pay a deductible before payments kick in.
On the other hand, both PIP and MedPay coverage generally don't require deductibles, so you won't have the extra expense to consider.
Supplemental Liability Protection
Finally, rental companies also offer supplemental liability protection, a type of insurance that covers the other party's injuries if you're at fault in an accident.
Pros and Cons of Rental Car Insurance
The coverage options offered by rental car companies are convenient for drivers without their own auto insurance policies. However, that convenience comes at a cost; prices can range from $10 to $30 per day for the most basic coverage, which can really add up if you're taking an extended trip.
Alternatively, if you don't have your own auto insurance, you may still be covered on a family member's policy. Be sure to check before incurring the expense of purchasing rental car coverage. Finally, if you'd rather not purchase a policy through the rental company, you have a number of options open to you.
Credit Card Coverage
Many major credit card companies offer rental car coverage that will work in tandem with your existing insurance policy. This type of coverage will generally help with damages incurred on your rental car if you get into an accident.
It's worth noting, however, that credit cards generally don't cover damages caused to other vehicles or injuries sustained by other parties in an accident. This means you'd have to pay out of pocket if you're found liable for damages and don't have any other form of insurance.
Before renting a car, ask whether your credit card company offers any auto coverage benefits. This can save you money and time spent poring over the details of the rental company's coverage policies.
If you don't have your own insurance but aren't interested in purchasing the policies offered by the rental car company, you also have the option of purchasing a stand-alone policy.
These policies offer similar benefits to those provided by the rental car company. The difference is that stand-alone policies are a one-time deal, and you pay by the day for as long as you need coverage. Occasionally, they are slightly cheaper than the ones offered up by the rental car company, making them more appealing for travelers on a budget.
Do note, however, that some rental car companies may require you to pay an additional fee if you're using an outside stand-alone policy.
If you rent cars fairly frequently and want longer term coverage, non-owner's insurance is a great option. This type of policy is designed for people who often need to drive cars that don't belong to them.
The benefit of this type of policy is that it ensures continuous auto coverage, pays for other car damages and other driver injuries, and saves you money when renting for an extended period. This type of policy, however, only provides liability coverage — that is, it won't cover damages to the rental car or yourself in the event of an accident.
Do You Really Need Insurance?
If you're only renting for a short time, it may be tempting to avoid paying for extra coverage. Rental cars always come with the minimum required liability coverage. So, how necessary is it to pay for anything extra?
If you want to save money, you may be able to skip personal effects coverage by removing any valuables from the car. Also, you may not need personal accident coverage if you have health insurance and are prepared to pay a deductible.
That said, we advise opting into the collision damage waiver. If you only have basic liability coverage and you get into an accident, you'll need to pay out-of-pocket for all rental car damages — which can be incredibly pricey.
By checking with your credit card company, your family's auto policy, and your health insurance company, you'll be able to know exactly what supplemental policies you need when renting a car. Armed with the right information, you can make a better-informed decision to get full coverage at the best prices.