Does My Car Insurance Cover Rental Liability?

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When does my liability insurance cover my rental car?
How is my rental car covered under my liability insurance?
How much do I have to pay if my liability insurance does not entirely cover my rental car?
If basic liability insurance doesn't cover my rental what will?
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When does my liability insurance cover my rental car?

I use a rental car three or four times a year. They always ask me if I want to buy insurance through them at the time of rental, and I always say no because I have my own car insurance policy. But in the back of my mind, I always wonder whether I’m making a wise decision. Does my car liability insurance provide me with enough coverage?

This question is a tricky one, because the answer is yes and no. Your liability insurance will cover a rental car, but only the damage that you do with your rental car, not the damage that you do to your rental car. Let me explain. If you get in an accident with another vehicle while driving a rental car, your liability insurance will cover the costs of the damage to the other vehicle and the person's medical bills if they're injured, but it won't cover any damage that you do to the rental car. But let's talk a little more about liability coverage. 

• Liability coverage: This provides coverage for any damage or injuries you cause to a third party if you are responsible for an accident. Liability insurance is the minimum insurance required by most states for car insurance, so most drivers will have this insurance and it will extend to your rental car. 

 If you do not have a current auto insurance policy, you will be required to purchase this coverage before you can rent a car.

How is my rental car covered under my liability insurance?

I was on vacation and had a rental car for two weeks. I was driving to my hotel and got in an accident with another vehicle. I didn't get the insurance policy offered by the rental company because I knew that my liability insurance would cover me, but how exactly does that work? 

Since you have liability insurance, hitting another vehicle, even in a rental car, will work much like getting in an accident in your everyday vehicle. Your liability insurance will pay for the damage you did to the other car or anything else that you hit. However, your liability insurance will not pay for the damage you do to the rental car, that will require different coverage.

But let's say you are in an accident with a third party and you're at fault. You'd open a claim with your insurance and it'd be handled like any other incident.

How much do I have to pay if my liability insurance does not entirely cover my rental car? 

I was in an accident with my rental car and there is damage to the rental car. It got me wondering how much of this damage will I be responsible for and how much will my insurance cover? 

If you have liability insurance, then any damage you did to another vehicle or person will be fully covered by your liability insurance. However, as we've already discussed, your liability doesn't cover damage to your actual rental car.

In this case, you would be fully responsible for the damage to your rental car, unless you purchased additional coverage through the rental company. This additional coverage is called a loss damage waiver, which means that the rental company will not hold you responsible for any damage done to your rental car while under your care.

If you purchase the loss damage waiver and your accident does not violate the terms of your rental agreement, then it will cover damage to the rental car.

If you do not purchase the loss damage waiver, you'll be fully responsible for the costs of the damage to the rental car and will have to pay out of pocket. 

If basic liability insurance doesn't cover my rental what will? 

I recently rented a car while on vacation and was involved in a fender bender. I had to pay for the damage to the rental car out of my own pocket. I don't want to get myself in this situation in the future, so what type of insurance do I need to purchase in order to cover my rental? 

In order to have coverage for damage that you do to your rental car, you'll need to purchase the loss damage waiver, which is offered by rental companies when you rent a car. This costs between $20 and $30 a day but could be worth it. 

• Loss Damage Waiver: When purchased, this waiver states that the car rental company will not hold your responsible for damage to the car as long as you have not used it in a way that violates the terms of your rental agreement (e.g., by driving recklessly, off-road, or while intoxicated). If your car insurance includes collision coverage and other than collision coverage (also referred to as comprehensive coverage), you already have a measure of protection. However, you still risk a large financial loss because of your insurance policy deductible and fees added by the rental car company for loss of use, diminished value and administrative costs.

So should you purchase the loss damage waiver? If you do not carry collision or other than collision coverage, I’d highly recommend it. If you do have this coverage, well, it’s up to you.