Everything you need to know about rental car insurance

Are you thinking about renting a car? Well, you’re not alone.

Owning a car can be expensive. The initial investment to purchase a car is high, and ongoing maintenance expenses keep increasing over time. Hence, renting a car can be a more affordable option for many people. You can rent a car for a few days or months, giving you flexibility.

But when it comes to renting a car, what about car insurance? Do you need it? The answer is yes. Having car insurance coverage is important when you’re driving a rental car.

But how does rental car insurance actually work? Why is it necessary? And what things should you consider before getting rental car insurance?

In this blog, we will understand how rental car insurance works. We will also look at its significance and factors to consider before buying rental car insurance.

How does Rental Car Insurance work?

Rental car insurance operates quite differently from standard car insurance, and its benefits and coverage can vary depending on the rental company and your location. Generally, there are three types of coverage insurers offer for rental car insurance.

The first type is Collision Damage Waiver (CDW). This coverage protects you against damages to the rental car’s body but doesn’t extend to tires, engines, windshields, and other parts. Additionally, it doesn’t cover incidents involving driving under the influence of drugs/alcohol or reckless driving.

The second type is theft protection. If your rented car gets stolen, the financial implications can become significant. Theft protection coverage ensures you won’t have to bear the expenses personally. It also covers damages resulting from attempted theft.

Lastly, there’s third-party liability coverage. This coverage takes care of damages caused to any third party if you’re involved in an accident while driving a rental car.

Significance of Car Rental Insurance Cover

Rental car insurance is crucial as it safeguards you against any damage to the car or third-party liability in case of an accident.

A super Collision Damage Cover can protect against bodily damage to a car and car parts like windows, engines, windshields, etc. In case of any injury to you or the car's occupant due to an accident, a personal insurance cover can take care of medical expenses in such a scenario.

Similarly, a roadside assistance cover can save you from inconvenience if your rented car runs out of fuel, breaks down, or leaves you stranded due to a puncture. Third-party liability coverage protects you against third-party liabilities, and the maximum limit for this coverage can get increased by purchasing Supplemental Liability Insurance. If you get into an accident with an uninsured other party, an uninsured motorist protection coverage will provide coverage.

If you want the level of protection offered by all the above coverages, opt for full protection coverage. It protects against damage to the vehicle, theft of the rented car, repair charges, and any other costs involved in the car rental insurance claim process.

Things to Check Before Buying Insurance for Rental Cars

There are several important factors that you should keep in mind before buying insurance for rental cars.

Firstly, you should be aware of the maximum limit of collision loss damage insurance. If the claim made by the rental company is greater than the coverage provided by rental car insurance, you might be responsible for paying the difference.

You should also be aware of whether it is primary or secondary coverage for rental car insurance. Primary coverage is ideal, and you can also avail of it with credit cards. This ensures that your credit card provider takes care of the insurance claim.

Moreover, you should keep in mind the extent of coverage. This will depend on the type of coverage you opt for. For instance, a collision damage waiver covers only the body of the car and not its parts. 

Frequently Asked Questions

1. How to purchase rental insurance?

Mostly your car rental company provides you with rental insurance coverage. You can purchase it from them.

2. Do I need to purchase extra insurance while renting a car?

Yes, you need accidental damage coverage. Mostly, your car rental company will provide you with the same.

3. I have personal insurance. Will it provide coverage if I rent a car?

Yes, if you have comprehensive coverage that provides liability protection to your car, it will also extend to your rented car.

4. Is a Collision Damage Waiver mandatory if I rent a car?

If your car insurance plan or credit card provides coverage for rental car damages, you need not purchase it. But in the absence of these, you need to purchase a Collision Damage Waiver.