Rental Cars and Car Insurance

Christmas arrives next week. In addition to knocking out the shopping for those who haven’t finished it yet, many people will be visiting friends and family or packing in a family get away before school starts back up. In many cases, this means, people will be renting a car. The big question I get from clients when travel is about to take place is whether or not their car insurance covers a rental car.

In most cases the answer to their question is yes, however, there are a few things to review before you get there. Let’s review these based on your current coverage limits, travel destination, and wrap it up with a couple of tips to protect you financially.

Coverage Limits: Most of the top car insurance companies will extend liability and property damage coverage to a rented vehicle, provided you have that coverage on your current policy. This means you should have comprehensive and collision coverage (referred to as “full coverage”), and the amount of property damage coverage should be enough to pay for a totaled rental car. If you don’t have these on your current policy then buy the insurance the rental car company offers. It is expensive, but it’s better than the alternative.

Travel Destination: If your current car insurance carrier does extend coverage to protect you and the rental car, it usually has destination restrictions. Most policies will cover you if you have an accident, anywhere in the U.S. It may also extend to American provinces such as Puerto Rico, the U.S. Virgin Islands, etc., as well as to Canada.

When it comes to Mexico, some companies will only cover your car up to 3 or 5 miles across the U.S. / Mexico border and exclude coverage to a rental car. I recommend anyone traveling to Mexico, whether in their car or renting a car there, to get the Mexican car insurance for the duration of your trip which will alleviate any surprises.

There are a few car insurance companies that extend coverage to rental cars in many European countries and a few Asian countries too, however, most do not. I recommend anyone traveling to an international destination to confirm with their agent what their policy covers before leaving the country.

Tips: In addition to knowing whether or not your company will cover you and the rental car you’re driving, I do suggest the following items to my clients.

  • Carry a photocopy of your car insurance ID with you. This can be invaluable if you’re involved in an accident where ever your travels take you.
  • I also suggest carrying a photocopy of your policy declaration pages with you too. These are the pages that show the level of insurance coverage you have and can help you determine if the car you’re renting will be adequately covered if you have an accident.
  • If you do use your car insurance policy to cover you in a rental car, just know that if you’re in an accident, it will show up on your policy as a claim. If you don’t want that to happen, pay for the rental car insurance from the car rental company.
  • Take pictures of all 4 sides of your rental car when you pick it up and then after you return it. This can protect you if you’re blamed for damage to the car after you’ve returned it.

What are your questions, comments, or experiences? Share them with me on my Google +, Facebook, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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