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Do You Need Rental Car Coverage?


The Basics About Renting an Automobile

What is Rental Car Coverage?

Optional rental car coverage, also commonly referred to as rental reimbursement or transportation expense coverage, helps pay for transportation costs—such as a rental car, fare for public transportation, and even cabs and rideshares—while your vehicle is being repaired for a covered claim. However, this coverage doesn’t apply if your car’s in the shop for routine maintenance or if you’re on vacation and need to rent a vehicle.

When Does Rental Car Coverage Apply?

In other words, rental reimbursement only kicks in after another coverage on your policy is activated. For example, if you run into a stop sign and your vehicle is no longer driveable, collision will pay to repair your car, while rental reimbursement can help you maintain reliable transportation while it’s being repaired.

Are There Limits to Rental Car Insurance?

Most insurance carriers stipulate per-day and per-claim limits for rental reimbursement coverage, such as $100 per day and up to $3,000 per claim ($100 per day for up to one month). 

In most instances, you’ll find the coverage listed on your policy declarations page as a split number, such as 100/3,000. This doesn’t mean that you can’t spend less, but you’re responsible for any overage if you spend more.

Should You Purchase Additional Insurance When Renting a Car?

The short answer? Depending on your auto insurance limits and the credit card you use when booking, you might not need to spend extra money on insurance offered through rental car companies. 

The detailed answer? There are several possibilities when it comes to insuring a rental car:

Underlying Coverage From the Company

Companies typically carry low-level coverage on their rental fleet. However, limits are often rock-bottom and could have you paying large out-of-pocket sums if you’re involved in a severe accident.

Coverage From Your Auto Insurance

If you carry comprehensive and collision on your auto policy, along with liability coverages, chances are that they will carry over to any private passenger vehicles that you rent for personal use. 

Coverage From Your Credit Card

The rental car coverage offered by credit cards can vary widely. For example, some only cover damage or theft of the rental car, while others act as primary insurance over your personal auto policy. Some cards may even reimburse you for your auto insurance deductible, include coverage for towing expenses, and offer loss of use (reimbursing the company for the time while the car is being repaired and off the road).

Either way, it’s vital for you to call the number on the back of your credit card to learn more about how the company responds to rental car coverage.

Additional Coverage From the Company

If you travel for business purposes, have high deductibles, or are worried about your rates going up if you’re involved in an accident, you might want to consider purchasing the rental company’s insurance. At an extra cost, of course (more soon).

Third-Party Coverage

Several independent companies (separate from the rental agency) provide rental car coverage, such as Allianz, Rental Cover, Insure My Rental Car, and Bonzah, as just a few examples.

Their coverage, limits, deductibles, and pricing can vary tremendously, so it’s essential to reach out to any companies you’re considering and find out these critical details.  

How Much Does Rental Car Insurance Cost?

Most insurance carriers offer rental reimbursement as optional coverage, so you’ll have to manually request it to be added to your auto policy. Fortunately, the cost is relatively minimal (between $2 and $15 per month).

Comparatively, you could pay between $30 and $60 extra per day if you choose to purchase coverage directly from the rental car company.

IHS Insurance Group Can Answer Your Rental Car Coverage Questions

Do you want to know whether or not coverage extends to a rental car from your existing auto policy? Considering adding it to your policy and want to know how much extra you’ll pay? Whatever your questions, the knowledgeable staff at IHS Insurance Group is happy to answer your questions!

Need a FREE Quote? Or do you have questions about rental car coverage or other aspects of auto insurance? We have three convenient ways to reach us:  

  1. If you prefer to talk to a licensed agent directly, please call (866) 480 5063.     
  2. If you prefer to fill out a quick form and have an agent get back to you at your convenience, use the GET A FREE QUOTE.     
  3. Lastly, for those that want an immediate quote, please click HERE.  

We look forward to speaking with you today!

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