Do I Need to Purchase Rental Car Insurance?

Renting a car can be convenient but understanding your insurance coverage can be tricky. Many people wonder, "Do I need rental car insurance if I already have a Personal Auto Policy?" The answer, like most insurance questions, is: it depends.

Where You're Traveling Matters

First things first, where are you renting the car? A US-based auto insurance policy typically covers you in all 50 states, US Territories, and possessions, the Virgin Islands, Puerto Rico and Canada. However, if you're venturing outside these areas, you'll need to purchase insurance directly from the rental car company in that country.

What Your Existing Policy Covers

If you are the Named Insured and have an active Personal Auto Policy, then Bodily Injury Liability extends to any vehicle you are driving.  If you have Comprehensive and Collision Coverage on your Personal Auto Policy as well, this coverage will also extend to a rental or temporary use vehicle, eliminating the need to buy this coverage from the rental company. 

However, there are exceptions.  Loss of Use refers to the rental company's lost income while the damaged vehicle is being repaired. Your Personal Auto Policy likely won't cover this, so it's generally recommended to purchase this coverage from the rental company.

"Temporary Use Vehicle" - A Word of Caution

Most auto policies extend coverage to "temporary use vehicles" similar to your primary car. But what if you're renting a sports car, a luxury SUV, or even a motorhome? Your Personal Auto Policy might not cover these vehicle types. It's always best to check with your insurance agent before renting a car or other vehicle to ensure you have adequate coverage.

No Personal Auto Policy: If you don't have a Personal Auto Policy, you'll absolutely need to purchase insurance through the rental car company.  This includes additional drivers who may be covered on a policy but are not the Named Insureds. 

Missing Full Coverage: When your Personal Auto Policy lacks Collision or Comprehensive coverage on at least one vehicle, you'll need to buy coverage from the rental agency.

The Importance of Loss of Use and Diminished Value

Even if your Personal Auto Policy covers the basics, consider the potential costs of "loss of use." If you decline the rental company's coverage and the rental car is damaged, you could be responsible for paying the rental company's lost income while the car is out of commission. Additionally, remember that Michigan (and many other states) doesn't cover "diminished value." This is the decrease in the car's market value after it's been in an accident and repaired.

Still Unsure? Contact Us at 517-580-7832

Navigating rental car insurance can be confusing. If you have any questions about your auto coverage and how it applies to rental vehicles, don't hesitate to contact us. We can help you understand your policy and make informed decisions about your coverage needs.

Important Notes:

• This information doesn't apply to commercial or oversized vehicles. Contact your agent for details regarding these vehicle types.
• This advice is not applicable when renting outside of the U.S. Territories and Possessions, Canada and Puerto Rico.

Haddad Wilson Group is located at 403 S Clinton St, Grand Ledge MI 48837. Protecting your future, the things you value and the people you love for 15 years.