We often get asked by our customers if their auto insurance covers rental cars. There are two directions this question can go and we want to cover both of them for you.
The first direction is whether auto insurance pays to rent a car, like if your car is in the shop or in an accident. If your car is just in the shop for routine maintenance (like brakes or a service recall), your auto insurance won't pay for a rental car. If you need another form of transportation, your best bet is to see if the service shop has a loaner, or rent (and pay for) your own car. If your car is in the body shop due to a filed claim AND you carry rental car reimbursement on your auto insurance policy, then the cost of your rental car may be reimbursed, up to the limits of your policy. Check your coverage documents to be sure.
The second direction for this type of question is whether the coverage from your auto insurance carries over to a car that you rent. The answer to this question is yes, usually (most of our carriers provide this coverage). This means that the liability and damage coverages you have on your own policy will cover you in a rental. (If your personal car doesn't have collision coverage for example, though, there is no coverage to carry over. Only the coverage you have can carry over.) We still always recommend you purchase the insurance from the car rental company, though. We do this for a few reasons:
-Rental car companies will often go after you for charges that your insurance doesn't cover, such as administrative fees and 'loss of income' for the days they can't rent their car while it is in the shop. These are costs you will end up paying out of pocket unless you buy their insurance. Some of our carriers offer options to cover these costs, but you still have to file a claim to tap into those coverages, which could lead to higher rates in the future.
-If you do damage a rental car and you have to file a claim, you now end up paying a deductible and future premium surcharges all for an accident with a car you don't even own. That stings.
When you are renting a car, you are often in an unfamiliar place (like on vacation) and you are in an unfamiliar vehicle. This combination leads to a higher frequency of accidents. That's why it's always a safe bet to buy the insurance the rental car company sells. When you have their insurance and you crash their car, you can [figuratively] return the car to the rental counter, toss them the keys, and be on your way! The ultimate decision lies with you and so we say 'rent at your own risk!'
If you have questions about this or anything related to your auto insurance, call us at (248) 531-8300. Our team is always happy to answer your questions and make sure you understand your coverage!
Levin Insurance Agency - Many Options, One Choice