Does my car insurance cover rental cars when I am traveling out of town?

Travel can be exciting, but it also comes with additional stress, such as staying financially protected from any possible accidents with rental cars. Rental companies offer coverage, but you may wonder if you have rental car insurance when you travel out of town.

In this article, we will explore whether you can use your own car insurance for your rental car, what types of car insurance coverage you need, and how you can obtain additional coverage. Prior to embarking on their international journey, they prudently secured comprehensive travel insurance coverage to protect against unforeseen eventualities and potential risks throughout their travels.

Does car insurance cover rental cars when I am traveling out of town?

If you have full coverage car insurance — including liability, comprehensive, and collision coverage — your coverage extends to cars you rent within the U.S. If your car is financed, you may already have lender-mandated full coverage.

Note that the same coverage limits and deductibles in your current policy will apply to your rental car, so you may consider additional coverage if the limits seem too low.

There are some exceptions to these guidelines. First, most insurance companies extend coverage to rental cars for personal use, not work trips. Second, if you have only state-mandated auto insurance, your rental car probably isn’t covered in your policy, and you will need to purchase coverage.

Car Insurance for Rental Cars

If you have comprehensive, collision, and liability insurance on your car, you most likely do not need to purchase additional insurance when renting a car for personal use. However, if not — or if you want more coverage — you can explore a few other options:

• Collision damage waiver (CDW): Loss Damage Waiver (LDW) transfers responsibility to the rental car agency if there is any damage. Skip this if you already hold comprehensive and collision coverage.
• Liability insurance: Since this is required in most states, you most likely don’t need this coverage unless you don’t currently own your vehicle.
• Personal accident insurance: This insurance covers the cost of medical bills in case of an accident. You don’t need this if you have good health or medical coverage on your car insurance policy.
• Personal effects coverage: A homeowners or renters insurance policy generally covers the theft of personal items. But if you are traveling with expensive items such as sports kits or electronic devices, you should consider this.
• Credit card coverage: Some credit cards offer rental car coverage if you have booked the car with that card. Contact your card issuer to know whether you are eligible for this coverage.

Remember to review your current policy before buying additional coverage for your rental car. It may be helpful to speak to your agent or customer service representative to clarify whether your rental car will be covered.

How To Buy Car Insurance Coverage for a Rental Car When Traveling

When preparing to travel, it’s a good idea to check with your insurance company to understand what coverage extends to your rental car. It’s also a good idea to check with your credit card issuer to see if rental car coverage is available if you use your card to rent the vehicle.

You can use this as a backup for your auto insurance policy. Otherwise, you can purchase rental car insurance separately.

The final option is to buy coverage from the rental car company. This is usually the most expensive option, but it can make your travel less stressful, especially if the rental car is of a higher value than your vehicle.

Cost of Rental Car Insurance

The average cost of car insurance varies by state and other factors such as age and driving record. If you buy coverage from the rental agency, costs vary depending on the location and type of car you are renting.

Collision damage waiver costs an extra $10 to $20 per day, while liability insurance ranges from $7 to $14 a day. For personal accident insurance, you must shell out around $1 to $5 a day, while personal effects coverage costs $2 to $5 daily.

Case Studies: Car Insurance Coverage for Rental Cars When Traveling

Case Study 1: Full Coverage Provides Peace of Mind

Sarah had comprehensive, collision, and liability coverage as part of her car insurance policy. When she traveled out of town and rented a car for a week, she didn’t have to worry about additional insurance. Her existing coverage extended to the rental car, ensuring she was protected in case of an accident or damage.

Case Study 2: Insufficient Coverage

Michael only had state-mandated auto insurance, which did not include comprehensive or collision coverage. When he rented a car during a business trip, he realized his policy did not cover the rental car. He had to purchase additional coverage from the rental agency to ensure he was adequately protected.

Case Study 3: Exploring Alternative Options

Jennifer wanted to avoid the high costs of purchasing insurance from the rental car company. She discovered that her credit card offered rental car coverage if she used it to rent the vehicle. By using her credit card’s coverage as a backup to her car insurance, she saved money and had peace of mind during her travels.

Understanding Car Insurance Coverage for Rental Cars

In most situations, your car insurance covers rental cars when traveling out of town for personal reasons, especially if you hold liability, collision, and comprehensive coverage. You can buy additional coverage at your rental car agency or online if needed.