Navigating Rental Car Insurance

August 28, 2019
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When renting a car for a family vacation, road trip, or other personal use, the last thing you want to worry about is your insurance coverage. Before renting a car, you'll have to decide whether to purchase additional rental insurance or not.

The coverage and deductibles you have on your personal automobile insurance policy normally applies to a rental car, as long as it's being used for pleasure and not for business.

If you don't have comprehensive, any physical damage or a loss to the rental vehicle may not be covered. In this case, you may have to pay for the claim yourself, which could be thousands.

The only way to protect yourself from a major loss in the event of an accident is with the right insurance policy. Therefore, it's important to understand all of your insurance options when renting a car.

Purchase a rental car endorsement through your insurance provider

Adding a rental car endorsement (OPCF 27) to your current auto policy allows you to transfer your car insurance coverage from your own vehicle to a rental car. This can typically be done at a low cost, but you'll want to have a solid understanding of what is and isn't covered under your policy.

Purchase coverage through the rental car agency

Car rental agencies themselves provide coverage - coverage that often has added perks like roadside assistance. While purchasing protection through a rental car agency is convenient, there are a number of considerations to keep in mind. Firstly, insurance purchased through a rental car agency can be expensive. Second, insurance from rental car agencies often carries a number of restrictions and may not include protection from lawsuits. As such, if you purchase coverage from a rental agency, it's important to know exactly what you're getting.

Use the coverage on your credit card

Many credit cards provide some form of rental car insurance, so long as you use the card to rent the car. In most cases, insurance of this kind provides basic protection for damage and theft. This type of coverage is typically only available if a person denies the insurance offered by the car rental company. Again, limitations and exclusions may apply, so do your research before going this route. It's important to note that this coverage shouldn't be used as a replacement for insurance, as the protection is typically limited to only a few thousand dollars.

Depending on your insurance policy, you may need additional coverage in order to be fully protected. For example, the type of vehicle you rent (ie. moving cans, trailers, luxury cars, and RVs) may have insufficient coverage under your policy.

These considerations can make the process of securing adequate coverage for your rental vehicle difficult. To ease the process, keep these tips in mind the next time you plan to rent a car:

  1. Check with your insurance broker whether your existing policy extends to rental vehicles.
  2. Ensure the amount you're covered for is equal to or greater than the value of the car you're renting.
  3. Check that your insurance coverage is comprehensive and include protection for third-party liability, collisions, theft, and vandalism.
  4. Compare rental car insurance prices online. Keep an eye out for discounts and deals.
  5. Check with your insurance broker about how an accident in a rental car would affect your auto insurance rates if you make a rental car claim.

Above all, to save you time and the headache of navigating your options, it's important to speak with a qualified insurance broker. He or she can explain your different options and ensure that you are protected in the event of an accident. To learn more, contact your broker today.

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