If you’ve ever rented a car, you may recall being presented with insurance options from the rental company. What are these options, and are they necessary?
First, know that, even if you don’t purchase insurance from the rental car company, your own personal auto policy follows you around in whatever car you are operating. That means you can submit a claim to your personal auto insurer if you are in an accident while driving a rental vehicle. Your insurer would pay to have the rental repaired, but it might not pay for important costs, such as the rental company’s loss of income from that vehicle while it’s in the shop.
Many people—even those with personal auto insurance—buy the “physical damage and collision waiver” through the rental company. It allows you to walk away from the damage done to the vehicle without touching your auto insurance policy.
You still should notify your personal auto carrier if people are hurt in the accident or if you damage someone else’s property. You do have the option of purchasing liability and personal accident insurance from the rental car company as well, and this may be a good option if you do not own a car and do not have a personal auto policy.
Speak with your insurance professional to confirm the details of how your auto policy covers your liability when using a rental car, especially loss-of-use costs.