Renting a car without car insurance is a tough job.
For people who don’t have cars of their own, naturally don’t have car insurance. So when they rent a car, the process of getting it insured is a little complicated. Most of the times when people have a personal auto insurance policy, they don’t know that it also covers rental insurance.
Renting a car without insurance is possible, but you need rental insurance to drive the car legally.
We’ll explain how it is done.
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Non-Owner Car Insurance
A non-owner car insurance is when a licensed driver rents a car and the policy covers damages. Imagine if you’re driving a rented car and you meet an accident on the road; you damage someone else’s vehicle or their property. And maybe some injuries that you cause them. If you accumulate all of this, you’re in for paying a very heavy sum.
But if you have non-owner car insurance, your insurance company will typically cover liability charges and bodily injuries of the other person so that you don’t have to pay a single penny out of your own pocket.
Just like regular auto insurance works- where the insurance company covers the cost and charges of the owner’s car, a non-owner insurance policy covers liability charges associated with the rental car.
What does it cover?
- Liability: Any damage that you cause to someone else’s vehicle or property. The expense will be covered under non-owner car insurance policy.
- Medical: Any bodily injury you cause to others.
- Legal: Any legal lawsuit or expense if you’re sued for causing the accident.
What does it NOT cover?
- Collision and Comprehensive: Damage caused to the car you’re driving will not be covered under non-owner car insurance.
- Bodily injuries: Any medical expenses that YOU suffer because of bodily injuries will not be covered.
- Other drivers: Non-owner policies only cover YOU, not any other drivers in the house like your children or spouse.
- Loss of personal belongings: If your valuable assets are stolen or damaged while in the car, they won’t be covered under this type of insurance.
Is it necessary to buy Rental Car Insurance?
If you’ve ever spent time negotiating on the car-rental counter, you will realize how much the company convinces you to purchase the Collision Damage Waiver (CDW).
What is it and why do companies push you into buying it?
A CDW is basically a waiver voucher which ensures that in case of theft or serious damage to the vehicle, the insurance company won’t come after you. Bodily injury isn’t usually covered under CDW.
So if the insurance company basically waives off all the amount that you may have owed, why do they push you so much into buying? What’s in store for them?
Well, the waiver isn’t as inexpensive! You are expected to pay somewhere between $10-30 PER DAY! That’s right. So if you’re going on a two-week trip by renting a car, you pay so much more in total than even the whole cost of the trip.
Car Rental with Insurance included
In some states it is illegal to drive a car without insurance, whether it be your own personal or rental car. But, if you’re a Canadian or US resident, chances are that some portion of the coverage may also be covered by your credit card company- all you need to do is check it out and see what coverage they’re also providing you.
You may not always HAVE to buy additional coverage for your rental car, because chances are that if you’re insured under a personal auto insurance company, it will cover rental expenses too. Even though rental insurance will only cover third party liability costs, with your personal auto insurance you can also pay for collision damages and your own medical expenses due to bodily injury.
Whenever you’re signing with the insurance company, make sure you read the whole agreement carefully and don’t hesitate to ask the right questions. Ask them what is included in the cover and they will tell you exactly, or best, have them write it down in the agreement if it isn’t already clearly mentioned.
Do I need proof of Insurance to Rent a Car?
If you’ve made a deal with the rental company that you’re coming to pick up the vehicle, you will have to prove to them that you’re already covered for rental insurance. Or, that your personal insurance also extends to rental.
In case you forget that certificate at home, you will have to ask your insurance company to fax the certificate to the rental agency as solid proof that you’re insured.
If in case your personal auto insurance doesn’t cover rental insurance, they will ask you to sign a CDW with them, and will probably force you into doing so- like we’ve discussed above.
Types of Rental Car Insurance and Cost
|Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)||Waives your responsibility for damage to or theft of the rental car||$9 to $19/day|
|Supplemental Liability Coverage (SLC)||Increases your liability coverage up to $1 million||$7 to $15/day|
|Personal Accident Insurance (PAI)||Provides medical and accidental death benefits if you or your passengers are injured or killed in an accident||$1 to $7/day|
|Personal Effects Coverage||Reimburses you for any personal property that is stolen from a rental vehicle||$1 to $5/day|
When do you pay Rental Car Insurance?
Even though it may be necessary legally to pay for rental insurance, it is also important that you note in what circumstances it might actually be a good idea to have a rental insurance policy.
If your already existing insurance policy has minimum liability coverage and you feel that it will cost you more in case you’re met with an accident, then rental insurance is your best bet.
If you don’t want to risk paying a high amount of deductible, then also it may make sense for you.
If your current policy has only insured you under commercial auto insurance policy, they won’t cover you in an accident with your personal or rental car. In such a case you will need to opt for rental car insurance.
It is important to get rental coverage on your car insurance so that the weeklong trip you’re planning with your family is covered by your insurance company. Just read the existing policy agreement properly and ask all your questions before getting on the road.