Do I Need Rental Car Insurance Coverage?

Do I Need Rental Car Insurance Coverage? |

At the beginning of the year, people want to head south for warmer weather. Can you blame them?

Today it’s 14 degrees outside and forecast is expected to be -1 overnight! Hawaii is sounding pretty good right about now.

So, when people travel they will often rent a car. We get asked many questions about rental car insurance:

  • Should I buy it?
  • Do I really need it?

Short answer: it depends.

If you are insured with a Washington Family Auto policy, typically sold by companies our agency represents (like Safeco, Travelers, The Hartford, or Mutual of Enumclaw, to name a few), and you have at least one vehicle with Comprehensive and Collision coverage, then yes, your rental car would be insured for liability and Comprehensive and Collision coverage.

However, most insurance companies will not cover you in Mexico.

If you have a substandard, high-risk auto insurance policy, then there would be no coverage extension for a rental car. You will need to purchase the liability and collision damage waiver sold by the rental car agency.

3 Types of Rental Car Insurance

Let’s examine three types of rental car insurance coverages:

1. Damage Waiver

Damage waiver or, as it is often referred to, collision damage waiver (CDW) or loss damage waiver (LDW), is optional damage insurance coverage that is available to you when you rent a car. Car rental companies treat the CDW as a waiver of their right to make the renter pay for damages to the car.

2. Supplemental Liability Insurance

Liability Insurance will cover damages to other people’s property as well as injuries to other parties you become responsible for if you have an at-fault accident.

3. Personal Accident Insurance

While supplemental liability coverage will cover damages to other people’s injuries and their property, personal accident insurance will cover you and your passengers for accidental medical expenses, ambulance expenses, and accidental death.

Advantages of Purchasing Rental Car Insurance

What are the some advantages for purchasing these coverages? Peace of mind, for one.

Another advantage is that the claim won’t go onto your personal auto policy if you damage the rental vehicle. So your rates won’t go up. However, most people will find that they already have these coverages on their own policy. Check with your agent or insurance company directly to review what coverages you have on your auto insurance policy.

What Your Auto Insurance Policy Does NOT Cover

Something that is definitely not covered under your own auto insurance policy is the loss of rental income for the time the car is in the shop being repaired for the damages you caused. If you return your rental vehicle damaged in any way, the rental car company is going to charge you for the lost time they could have rented the car while it was in the repair shop.

And since they already have your credit card information, they will likely collect payment from your credit card. If you purchase their collision damage waiver, you won’t be charged for the lost rental time while the car is in the shop.

As with any insurance, it’s nice to have a knowledgeable, friendly agent who can assist you. If you have additional questions about car rental insurance, don’t hesitate to contact us.

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