Insurance Basics

Rental Car Insurance: Are You Covered?

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The next time you rent a vehicle, you should review the existing insurance you may have through your personal auto policy or credit card before purchasing additional coverage from the rental company.

If you already have auto insurance, you may be covered under your policy for collision damage and a certain amount of rental car liability. However, it is essential to understand exactly what your policy offers since there may be important restrictions to consider.

If your credit card company offers rental car coverage as part of its membership benefits, you also need to understand the specifics of that coverage. Although most standard credit cards do not provide any protection, most Visa and MasterCard gold cards and American Express personal cards provide secondary rental car collision-damage coverage. This coverage picks up whatever collision-damage charges are not covered by your own insurance. If you don't have any auto insurance, the card's policy becomes primary.

If you have insufficient coverage through these sources and need to purchase the insurance offered by the rental company, don't assume it will cover you for all possible accidents. Two important items to closely review on the rental agreement are:

  • Deductible Limits
    The deductible is the amount you must pay, if damage occurs, before the policy coverage takes effect (e.g. $500). Bear in mind that some agreements may exclude coverage for certain types of accidents, such as if you cause an accident by speeding.
  • Liability Coverage
    If the policy only provides the minimum required by state law, you will be held responsible for any damages in excess of the stated minimum.

Make sure you have all the facts before deciding what insurance you need. We can explain the coverage your personal policy will provide and determine what additional insurance you may need for the best protection.


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