If you are renting a car, you may want to know what happens if you get into an accident. Rental company insurance and your personal insurance may combine to cover any damage or injuries that result, assuming that you have taken precautions to obtain the appropriate coverage. You should be aware that you will be responsible for any damage caused to the vehicle while you were renting it, whether or not you were at fault for the accident.
Coverage Through the Rental Company
A car rental company usually will offer liability coverage, personal accident insurance, and personal effects coverage. Liability coverage applies when you cause an accident while driving a rental car. It covers medical expenses and property damage sustained by other people who were involved in the accident. If you already have personal car insurance, you may be tempted to decline this type of coverage, but you should be aware that your personal insurance may not apply in every situation. It may make sense to get liability coverage to make sure that you are fully covered.
Personal accident insurance covers injuries to the driver or other people in the rental car. You may feel that your own personal injury protection (PIP) insurance or your medical insurance will cover these costs. However, you should consult your insurance provider to determine whether this coverage is redundant and find out whether one policy or the other would be more cost-effective. The deductible under your PIP coverage may differ from the deductible under the policy offered by the car rental company.
Personal effects coverage accounts for damage to personal property in the rental vehicle. As long as you have homeowner’s or renter’s insurance, you probably do not need this additional coverage unless you would prefer not to pay the deductible on your insurance.
Collision Damage Waivers
This option is not exactly a type of insurance coverage, but it is often presented together with insurance. In exchange for an additional fee, the rental car company agrees to waive the costs of vehicle repairs or replacement based on an accident or theft. This is usually subject to exceptions such as reckless driving by the driver renting the vehicle. Your personal car insurance policy may cover any damage or loss to the rental car, so you may not need a waiver. Even if your policy does provide coverage, however, you may want to get a waiver to avoid filing a claim on your policy, which means paying the deductible and possibly facing higher premiums down the road.
People who already own a car or drive regularly likely will have obtained their own car insurance. This may cover or mostly cover the same issues as those covered by insurance through the rental car company. It may be worth checking to make sure that there is enough overlap to make you comfortable. A driver who declines liability coverage or other types of supplemental insurance from the rental company may need to provide proof of their personal insurance policy.
Some credit card companies may provide car rental insurance automatically if you use the credit card to rent the car. This insurance usually is limited and does not include liability coverage, so you probably should not rely on credit card insurance alone.