Rented Vehicle Coverage: Auto Policy Coverage Versus Rental Car Agency Coverage
Rented Vehicle Coverage: What your auto policy is likely to provide
Loss Damage Waiver/Collision Damage Waiver: If your auto policy includes comprehensive & collision coverage, this typically will extend to the rented vehicle and the applicable deductible will apply.
Liability: If you have a personal auto policy in force, liability coverage will extend to the rented vehicle for property damage and/or bodily injury caused to others.
Personal Accident Insurance: If your personal auto policy includes medical payments coverage, this coverage should replace personal injury protection coverage offered by the rental agency.
Theft protection for personal property: If you have a homeowners or renters policy, coverage should extend to protect your personal property if stolen from rental vehicle up to the covered limit amount. Any applicable deductible will apply.
Rental Car Agency Coverage: What the car rental agency is likely to provide
Loss Damage Waiver/Collision Damage Waiver: Waiver is generally provided by rental company that states the rental company cannot seek damages from you if there is damage or theft to the rented vehicle.
Liability: Rental vehicle agencies offer supplemental liability protection, which will pay for the damages done to others’ vehicles and/or property.
Personal Accident Insurance: The rental car agency’s coverage may cover medical costs for you and any passengers if involved in an accident, similar to medical payments on a personal auto policy.
Theft protection for personal property: The rental car agency’s coverage may cover your belongings if they are stolen from the rental vehicle up to a set dollar amount.
Consider This: When comparing the difference between forking over the extra cost for the coverage provided by the rental agency vs using the rented vehicle coverage your auto policy may provide, review the list below to help in your determination:
If you must file a claim against your auto policy for damage done to the rental car, it will impact your premium and claims history the same as if there was a loss that involved your covered vehicle.
Your personal auto policy excludes coverage if the rented vehicle weighs over a certain amount. For example, if you are renting a moving truck, it is likely your auto policy will not respond due to weight limit of truck.
Your auto policy may not provide coverage for loss of income to the rental car agency. If there is damage done to the rented vehicle and the vehicle cannot be repaired immediately, the rental car agency has the right to charge the driver for the loss of income during this time subject to the rental car agreement.
Actual Cash Value versus Replacement Cost Coverage: If you are held liable for damage to the rental vehicle, your rented vehicle coverage from your auto policy may only provide replacement or repairs based on actual cash value. If the rented car agreement states that the parts to replace must be on a replacement cost basis, the rental agency may charge you for the difference.
Benefit of Paying More:
While the cost of coverage from the rental car agency is significantly higher than what you would pay to have the coverage included on your personal auto policy, it is important to remember that it also fills in gaps in the coverage provided by your personal auto policy.
Sources:
https://www.nerdwallet.com/blog/insurance/rental-car-insurance/
https://www.daveramsey.com/blog/should-you-buy-rental-car-insurance
https://www.allstate.com/tr/car-insurance/rental-car-insurance.aspx