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Auto Liability Myth #10 – “When driving a rental car, I’m covered under my personal auto policy”

Will your personal auto policy cover you if you drive a rental vehicle?

A typical auto insurance policy provides liability coverage. If you have a personal auto policy, the liability coverage portion of your policy would provide payment for the damage you cause to another party’s vehicle while driving a rental car within the United States. It would also provide coverage for injuries you cause to another party while operating a rental vehicle. However, your auto policy may not pay for the damage sustained to the car you rented.

About Waivers

Most rental car companies offer their customers the option to purchase a “collision damage waiver” or a “loss damage waiver.” These optional coverages would fill the gap potentially created by your auto insurance policy. If you have comprehensive and collision damage coverage on your personal auto policy, then those coverages would apply to the rental vehicle. One thing to consider is that your policy likely has a deductible that must be paid before coverage is provided. That same deductible would apply when repairing damage to a rental car.

About “Loss of Use”

Another potential uncovered cost is “loss of use.” If the rental vehicle is damaged such that it cannot be rented and generate income for the rental car company, the rental car company will likely charge you for that loss of income. That “loss of use” charge is not typically covered under a standard personal auto policy. Therefore, those without comprehensive or collision coverage, have a high deductible or are concerned about the “loss of use” charge, may want to consider purchasing an optional coverage from the rental car company.

Other Countries and Renting for Business Purposes

Also remember that coverages under a personal auto policy typically only apply in the United States and possibly Canada. If you are renting a car in Mexico or another country outside the US, your personal auto coverage may not apply. In addition, if you are renting a car for business purposes, it is likely that the business’ auto coverage would apply. You may want to check what type of coverage your employer has before deciding on declining or accepting the insurance options provided by the car rental company.

Next Steps

As you can see, something as simple as renting a vehicle can lead to a number of insurance questions. That is why at Rue Insurance, our licensed agents are available to speak with you one-on-one, to answer your questions and develop a customized insurance plan that fits your unique needs. Contact us today and learn more about how to Be Ready with Rue at 609-586-7474 or on our website here: https://www.rueinsurance.com/contact/.

Robert Plasencia

About Robert Plasencia

Robert joined Rue Insurance in 2020 as a Personal Risk Advisor with over 10 years of experience in the insurance industry. Robert specializes in delivering innovative solutions and advising our personal lines clients to reduce the total cost of risk at the right budget.​ About Robert | More Posts by Robert