Am I Covered By My Insurance When I Rent A Car?

We get a lot of questions from clients every day about their insurance coverage.  Unfortunately, many times clients will just assume they know the answer, or worse, ask their friend, neighbor, or coworker for advice.  We would much rather take a phone call or email to answer a policy question than have someone find out too late that the answer their brother-in-law gave them was incorrect.  Much better to know in advance if/how coverage applies so you can make educated decisions.  One of the most frequently asked questions we get is:

Does My California Auto Insurance Policy Cover Me When I Rent A Car?

The answer is pretty straightforward.  If you currently carry comprehensive and collision coverage on your vehicle(s), then yes, your policy will transfer to provide coverage for a rental car, as long as you are the person who rented the car, and you or your spouse (or other listed driver on your policy) are the person driving the rental car – nobody else.  Permissive use is not covered on a rental car, so don’t let anyone else drive the rental car.

What About Out-Of-Pocket Expenses?

There are some potential out-of-pocket expenses that you need to know about.  You would still have to pay your deductible if something happens to the rental car.  So if the rental car is stolen or involved in a collision, you would be responsible for your deductible just like if a loss occurred in your own vehicle.

Also, if the rental car is in the shop being repaired due to a collision loss, it is not earning the rental agency money like it normally is, so the agency could try to charge you loss of use (the daily rental rate) until the car is repaired and can be rented out again.  Most companies do not cover loss of use for a rental car, so you could potentially have to pay this expense out-of-pocket.  If it takes a few weeks for the rental car to be repaired, it could end up being quite costly.

Are There Any Exclusions?

There are a couple of caveats that you need to be aware of when it comes to insurance coverage for a rental car.  First off, the coverage would only apply to a private passenger vehicle, in other words, no commercial vehicles like a U-Haul moving truck.  If you rent a commercial vehicle, you will need to purchase insurance from the rental agency.  Second, the coverage would only apply in the U.S. or Canada, no other countries.  Lastly, the duration of the rental cannot be for more than 30 consecutive days.

The alternative to potentially dealing with out-of-pocket expenses for your deductible and loss of use is to buy the insurance offered by the rental agency.  This is sometimes called “walk away” coverage, because there is no deductible, and if something happens to the rental car, you just hand them the keys back and “walk away”.

When renting cars previously, I’ve let my own policy cover me, knowing the potential for out-of-pocket expenses.  At other times, I’ve purchased the insurance from the rental agency since I was on vacation and unfamiliar with the roads and didn’t want any extra stress in the back of my mind.

What If I Still Have More Questions?

Hopefully this helps to explain, and answers your questions regarding coverage for a rental car.  If you have any other concerns, or need further clarification, please feel free to call or email us…we’re here to help!  If you’re not currently a client, but would like to get more information, head over to our contact page to get started, and we’ll be in touch shortly to answer any of your specific questions.

All my best,

Todd Payne

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