Rental Car Reimbursement vs. Insurance for Rental Cars
Whether you’re renting a car for vacation or while your regular car gets repaired, it helps to know what
car insurance coverage you should get before you drive it. In some cases, your rental car may be covered like your own vehicle under your existing car insurance. Rental reimbursement coverage is also available as an additional coverage if you need it. Also known as transportation expense or rental car coverage, this can help pay for a rental car if your vehicle gets damaged in an accident or another covered event. It’s important to know that the transportation expense doesn’t cover your rental car for a vacation.
Rental car insurance can really help when you need it most. To help you understand it better, we put together a list of the six things you need to know about
rental car insurance.
How to Use Accident Rental Car Reimbursement
Accidents happen. And sometimes they leave your car totally destroyed. If you’re in a car accident, rental car reimbursement coverage, also called transportation expense coverage, can help pay for a rental while your car gets fixed. Be aware this coverage is typically only available if you carry both comprehensive and collision coverages.
How Rental Car Reimbursement Coverage Works
If you include rental car reimbursement coverage with your
auto insurance policy, the cost of your rental is subject to daily limits. You can choose your daily limit based on how much you think it’ll cost to rent a car in your area.
Your transportation expense coverage may limit the types of vehicles you can rent before having out-of-pocket expenses. So, if you choose a lower amount of coverage and your daily rental vehicle costs exceed your coverage limits, you’ll have to pay the difference out of pocket. You can make changes or upgrade your auto coverage to help reduce your potential out-of-pocket costs.
Does My Insurance Cover Rental Cars?
Are you asking yourself, “
Do I need rental car insurance?” Maybe. Some personal car insurance policies extend coverage to a rental car. Others may require you to get extra protection. That’s why reviewing your car insurance policy is a good idea.
At-the-counter Auto Insurance for Rental Cars
If you rented a car, they probably asked you about insurance coverage at the rental counter. Rental car companies typically offer four coverage options:
Liability coverage: Helps cover costs if you damage another person’s property or hurt someone while driving your rental car. This can cost about $7 to $14 a day.2
Loss-damage waiver: Helps you avoid financial responsibility if there’s damage to the rental. Also known as the collision damage waiver, it can cost an average of $10 to $20 a day.3
Personal accident insurance: Helps cover medical bills if you or your passengers get hurt in a car accident. This coverage can cost about $1 to $5 a day.4
Personal effects coverage: If your personal belongings get stolen, this coverage, which costs about $2 to $5 a day, can help cover your replacement costs.5
Understand Your Existing Car Insurance Coverage
You may find that your existing car insurance coverage can help protect your rented car. Some typical personal auto insurance coverages that overlap with insurance for a rental car include:
- Bodily injury liability insurance, which helps cover the other person’s medical bills if you hurt someone else in a car accident. If you have this already, you may not need extra liability coverage from the rental company.
- Property damage liability insurance to help pay if you damage someone’s property with your car. You may not need liability coverage for a rental car if you already have this insurance.
- Personal injury protection, also known as no-fault insurance coverage, helps cover medical bills if you or your passengers get hurt in a car accident. This overlaps with personal accident insurance the rental company may offer.
- Comprehensive car insurance, which helps protect your car from damages caused by fire, theft, riot, windstorm and hail. If you have this coverage, you likely don’t need loss-damage waiver for your rental car.
- Collision car insurance to help cover your repair costs if you get into an accident. If your existing car insurance policy has this coverage, you probably don’t need collision damage waiver.
Many
state car insurance laws require you to carry bodily injury and property damage liability coverages. So, your existing car insurance policy may already have enough protection for a rental car.
Don’t forget to also review your homeowners or renters insurance policy. These policies may offer coverage for your personal belongings even outside of your home. If that’s the case, you may not need personal effects coverage for your rental car. You can work with your insurer to verify which coverages are in your existing car and homeowners insurance policies.
Get a Quote
The Hartford is an insurance company backed by decades of experience. In fact, we offer the only national auto and home insurance program endorsed by AARP. Our team is here to help you learn more about the AARP
® Auto Insurance Program from The Hartford.
1 We can help you understand the differences between rental car insurance and rental car reimbursement. Call
888-546-9099 to get a
car insurance quote today and learn how we can help protect you and your loved ones on the road.
Last Updated: September 25, 2023
2,3,4,5 D.C. Department of Insurance, Securities and Banking, “Things to Know About Car Insurance and Rental Cars Before Starting Your Road Trip”
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