Does Your Personal Car Insurance Cover Your Rental Car?

rental car insurance for a woman

If your vacation plans include renting a car, you may be tempted to waive the CDW/LDW (collision and loss damage waiver)  the rental car company rep is hammering you to buy. While that can be a smart way to keep 20 to 30 bucks day in your pocket, make sure you’re not being penny wise and mega-pound foolish. Don’t just assume that your personal car insurance policy will protect you. Read the fine print and be aware of these facts about personal car insurance and rental cars.

Does Your Car Insurance Cover Rental Cars?

Car insurance policies are regulated by individual states and vary from carrier to carrier. While personal car insurance policies can extend damage protection to rental cars, they typically only do so if you have a full coverage policy – also known as comprehensive and collision coverage. If you’re only carrying the personal liability and uninsured motorist coverage that most states require, it will not cover the loss or damage of a rental car.

Even if you do have collision and comprehensive personal auto insurance, your policy may be limited to the value of the car you own, not the one your rented.

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If your personal auto insurance coverage does extend to a rental car, it still may only pay the actual cash value (its published blue book depreciated value), or the cost to repair or replace damage after you meet the deductible. If you bother to read your rental car contract (and you really should), you may find that it requires you to reimburse the full retail value of the rental car. Trust us, that’s going to be a lot more than the actual cash value and you’ll have to make up the difference out of pocket. You’ll probably also face a bump in your premiums next time your policy comes due for renewal.

Your comprehensive personal auto insurance may not cover the rental company’s claim of loss of use of its vehicle while it’s being repaired or replaced. Check your policy to see if it has a Use of Non-Owned Cars endorsement to cover this potentially hefty charge.

Adding insult to injury, even after the rental car you wrecked has been repaired, the rental car company may also claim diminished value because the repaired vehicle won’t have the resale value of a similar unit that wasn’t in an accident. Your personal car insurance will not pay for this so you’ll have to.

If you’re an infrequent car renter or inadequately insured by your personal auto policy, bite the bullet, buy the CDW/LDW and enjoy your vacation.

What’s Your Takeaway?

If you’re planning a trip that involves renting a car, check the fine print on your personal car insurance policy before you leave for your trip.

  1. If you have comprehensive and collision coverage on your personal automobile insurance, in most instances the coverage and deductibles will extend to your rental car. You’ll also want to make sure the coverage you have on your personal car insurance is sufficient to cover your liability for damages to the rental car.
  2. If you don’t have personal car insurance, you probably should reach out to your credit card companies to see if they can provide coverage.
  3. If you don’t have both insurance mentioned above, you’d better purchase insurance from a third party or the car rental company you are using to protect your entire trip.

Car Rental Saving Tips And Tricks For You

1. Off Airport Rentals

If you have ever rented a car at O’Hare or Lindbergh Airports, or for that matter many large city airports, you will find that the car rental part of your bill can be almost the same cost as the tax/fee part of the bill. This is because, the Cities are trying to charge the business visitor for their internal costs, rather than raise local taxes. They know that the business traveler may not have many options, if they have to be in that city, so they will pay.

  • Fees and Taxes: Five Recent car rentals at San Diego and Chicago facilities charged a combined surcharge over the cost of the rental of 53%. The “facilities charge” is the largest of the surcharges.
  • Off Airport Rentals: If you were to take an Uber to a facility that is closer to your ultimate destination and rent the car there, you would find that you can save a significant amount. Not to mention the hour you might spend waiting in line at the airport counter for your car keys.
  • Time is money and Money is money!

2. Free Upgrades

When you rent from an off airport smaller facility, there is a good chance that if you reserved a full sized car, they might have to upgrade you as they are likely to have only economy cars available. If they downgrade you, you will pay less, but if they upgrade you, the upgrade is free.

3. Insurance Costs

While we all know the pain of reading an insurance policy; you should take some time and email your agent to be sure your auto insurance policy covers rental cars. This can save you a great deal of time and money. The rental agents are very good at scaring you into thinking that you need their insurance. Make sure you ask your agent about foreign rentals as some countries have unique rules that can also cause you pain.

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4. Fuel Option

We have all been guilty of bringing the car back with slightly less than a full tank of gas. After all you have to drive it from the service station to the rental facility don’t you! The rental car companies know this and play on your fears by either asking you for a receipt to show you refilled, or creating the “Fuel Option” where you buy a full tank up front from them. The problem is that by purchasing a full tank initially, you will probably never use it all and therein is the profit for the rental car companies. Always make a mental note of any service station you see as you drive away from the airport, for your return fill-up.

5. Add-On Costs

Some times you cannot avoid taking advantage of the additional services that rental companies provide like child car seats. It can be difficult lugging around those seats, especially if you have more than one youngster. However, Satellite Radio and Mapping devices and Road-side service, are definitely not necessary. With your new iPhone, or other such device, you can provide the first two, and an inexpensive AAA membership (or again maybe your insurance policy) will take care of the last. In these cases you can use these other services all year round. In many cases your car will come with radio and navigation in any event, as they cannot take it out just because you did not want it.

There are a few other considerations for rental car companies that most experienced travelers understand, but are worth mentioning since you have read this far:

Other Rental Car Issues

1. Off Site Car Rentals

Be sure to go far enough away from the airport so that you do not have to put up with long lines at the counter. Sometimes the lesser known rental companies save money by having just one attendant. You and your children will appreciate the shorter line!

2. SUV Vs. Mini-Van

All you young dads/moms, who do not see yourself in a Mini-van take note that in many cases they hold more than the SUV.

3. Lower Mileage Cars

While not a necessity, you should check the mileage on the car you rent. Obviously the lower the mileage the better.

4. Lastly Some Pet Peeves

  • Tell the rental company you do not appreciate lugging around multiple keys sealed together, when all you need is one!
  • You do not need to be bombarded with surveys after each rental, you will tell them if you had a bad experience. If only they were so conscientious about sending you your misplaced phone charger.
  • Don’t try to cover up a smoker’s car with that awful smelling spray and rent it as a non-smoking car, we know better.
  • Make sure you walk around the car and note damage, because they certainly will when you return it.
  • We don’t mind a slight wait for a receipt, so we can do our expense report, but don’t allow the attendants to stand around ignoring customers while they are in a hurry.


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