This is a great question, and unfortunately, the answer is: it depends. Let’s look at the different components of coverage you will need when renting a car and the different options available for them.

Liability Coverage

Liability coverage is the insurance that drivers are required to carry by law. Each state has different rules about the exact amounts of coverage that are necessary at a minimum. In South Carolina, the minimum amount of liability coverage required by law is 25/50/25. For more about what those numbers mean, take a look at our post here.

As long as you have an auto insurance policy that is currently in force, you have at least the minimum liability coverage required by law. This coverage will extend to you when you are driving a rental car. However, it is very important to note that this coverage only pays for damage you cause to other people’s property or injuries to other parties. Liability coverage does not protect your rental car from any damage you cause to it, even though you don’t own it.

Think of the rental car as taking the place of your usual vehicle for the purposes of liability coverage. Your liability coverage won’t cover your own car, so it won’t cover a rental either.

Collision Coverage

This is what a lot of people mean when they ask if their insurance will cover a rental car. The answer here is that it depends. Some policies will extend collision coverage to the rental vehicle. If your insurance company is willing to do this, it is also important to consider the value of the rental car vs. the value of your car. If on your trip to California you decide to rent a brand new convertible to enjoy the West Coast sunshine while you drive up the Pacific Coast Highway, we can’t fault you for that. But if the car you left at home is a fifteen year old Toyota with 150,000 miles on it, its probably worth a lot less than the rental. In this situation, even if your company would have been willing to extend collision coverage to your rental vehicle, they very well may deny a claim, due to the large disparity in value between the car you insure (and are paying premiums for). They might pay a fraction of the damages, or none at all. This is something you would only be able to figure out in the middle of claim, so instead, its better to ask your insurance agent before you rent the car. Let them know what car you plan to rent and for how long, and ask if your collision coverage would extend to that vehicle for the duration of your rental. A quick phone call or email will save you loads of anxiety and very possibly money, if you do have a wreck that is your fault.

Now, what is your company won’t extend the coverage to your rental, or they will in some situations, but not yours because of a large difference in the value of the vehicles, as discussed above?

You still have options. One, is to purchase a damage waiver from the rental car agency. This is not insurance, but instead, releases you from any responsibility for damage to the vehicle, with some exceptions. Generally, willful damage to the vehicle, or risky behaviors like leaving a car running unattended, driving while intoxicated, or speeding are not covered by a damage waiver. Theft is not usually covered either. These are factors to keep in mind if you do decide to purchase the damage waiver. Of course, driving under the influence is never a good idea, and there are other things you can do to mitigate your risk, like obeying the speed limit and posted traffic signs, and always locking the car, but it is still something to consider. A damage waiver will vary in price based on where you are renting and the vehicle you choose, but for one national car rental chain, we found the collision waiver to cost between $20 and $30 per day.

You may also have coverage through one of your credit cards, if you use that card to pay for the rental. Many credit card companies provide rental car damage coverage as a benefit to having a card. A quick check of their website will usually reveal what coverage, if any, is available to you. You can also call their customer service for assistance with this if you are unsure what the card covers. Be sure to look at the policy for your specific card though. Many credit card companies have a wide range of different cards and they can all have different policies. Don’t assume that yours has the same as another card they issue.

Another option still is to buy stand alone rental car insurance. There are several companies that will sell rental car coverage for just the duration of your rental, many of which offer an instant quote online. For one major carrier, we got a quote of just $11 per day for $50,000 in rental car damage coverage. If you don’t know where to look, a call or email to your insurance agent will get you pointed in the right direction. Even if they don’t sell the coverage you need, they can refer you to the companies they trust.

What about comprehensive coverage?

For your personal auto policy, damage that is not caused by a collision would be covered by comprehensive, or other-than-collision coverage. This would also include theft. While the damage waiver from the car rental agency covers physical damage both from a collision and from other acts, such as vandalism, they typically do not cover theft. This would be another question for your agent when asking if your own policy covers the rental. If it does not and you choose one of the other options outlined above, make sure to read your policy information to find out. If you take reasonable precautions, like not leaving your rental car unlocked, or parking it for extended periods in an unsafe area, the risk of theft is low, but it cannot be completely ruled out. It’s much better to know what is covered and what is not before a claim, instead of finding out after something happens.

Medical Expenses

Another coverage that is available is Personal Accident Insurance. This coverage provides coverage for medical expenses of you and your passengers in the event of a wreck, regardless of fault. This is typically less expensive than a damage waiver, but you will be able to get an exact daily rate for the coverage before you make a reservation. We recommend considering this coverage, as compared to medical costs if someone ends up in the hospital, it is very affordable.

So remember, next time you plan to rent a vehicle for any reason, check with your insurance agent first to see if your policy covers damage to the rental car so you can make an informed decision about your options.