Car Rental Insurance 101 – Why Does it Exist?

Jul 21, 2021 | Cheap Car

Some of you new to car rentals might be wondering why providers often mention insurance coverage when presenting their rates. Is it something to do with your liability? Is there a law making them do it?

Is it something you would like to know?

Well, at least for that last question, you can be assured that the correct answer is: Yes!

A lot of the confusion stems from the fact that, even if you already have insurance for your own vehicle, there is actually not much known about insurance for cars rented during your travels.

Here are a few important facts to keep in mind and how this can help you.

1. It is (generally) separate from your car insurance.

As implied earlier, there is your own personal car’s insurance and then there is the rental car’s insurance. Their coverage is completely separate because they are obviously tied to two different vehicles.

Now, there are situations where you may have policies in your own car insurance that do touch upon rental cars. However, this highly depends on your insurance provider, and it is best to discuss it with them even before your trip.

That way, you have a better idea of what to do in case you get a rental and there is any sort of accident involved.

2. Rental cars with their own insurance covered have less liability issues.

Car rentals that have their own insurance covered in their rates are usually more transparent about liability when out on the road. That is why some service providers are eager to make such statements in their advertising. It is their way of saying that you have less to worry about in case of an accident.

On the other hand, you certainly have every right to learn more about the fine print of your rental car’s liabilities. Will this cover incidents regarding your car’s belongings? What about medical fees and if any of it extends to additional passengers? The best services will always have a good answer so as long as you ask.

3. Waivers are not really insurance.

Lastly, it may not always be enough just because a car rental service has you signing a waiver regarding damages or accidents. Because for all you know, reading the fine print of that waiver could very well end up transferring some form liability to you!

So, to be on the safe side, it is recommended that you really just opt for some form of coverage (be it yours or clearly guaranteed by your car rental service provider). Do your best to understand their process for covering damages as much as possible.

Overall, as with all things to do with auto insurance, it always pays to be doubly sure about your coverage no matter where you are in the world. If you cannot afford to have it yourself when renting a car out in an unfamiliar town, then at least check if the service provider tacked it on to the rates.

Likewise, never hesitate to talk about liability with them. It is one of the easiest ways you can gauge if a car rental service is giving you genuine value, or is cutting corners. There may be a few things you can get away with when trying to get a budget car rental, but lack of any coverage is not one of them!

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