One of the most common questions we are asked as agents is “Is my rental car covered when I go on my trip?” The short answer: yes and no.
The “yes” part of the answer is easy. The one thing that the vast majority of auto insurance policies cover is the liability associated with any accident the insured is involved in. Meaning, if you get in an accident with another driver while you are driving your rental car and you physically hurt the other driver, your personal auto insurance policy with cover the liability and pay for the injuries to the other driver. Your personal auto insurance will also pay out the medical payments for any bills you accumulate for your injuries in an accident.
The “no” part of the answer is a little more difficult. The one thing that most personal auto policies don’t cover is the physical damage to the rental car, which is why most rental car companies offer insurance at the time you are paying to rent the vehicle. The insurance they are offering covers any physical damage to the rental car including: a collision with another vehicle, dents from hitting an object, scratches, etc. Most customers are wrongly under the impression that their personal auto policies provide coverage for physical damage. There are some insurance carriers that allow you to add endorsements to cover rental car physical damage, however, most don’t.
With this knowledge, most insured’s find themselves with a dilemma: do they purchase the rental car insurance coverage or do they take a gamble and go without? We leave this decision up to the insured’s however, as agents we strongly recommend that everyone buy the rental car coverage unless their personal auto policy has been properly endorsed. Although it doesn’t feel like an accident in a rental car can happen to you, it can; and we would hate to see any customers get stuck with a large bill from the rental car company just to cover damages to one of their vehicles. Sometimes it is better to play it safe, than assume that much risk.