Do I need to purchase additional insurance coverage when renting a car?

Often our agents are asked if purchasing additional insurance from rental car companies is necessary. Although there is not necessarily a clear cut answer, it is important to know that your liability and collision coverage generally still apply.

What is liability coverage and collision coverage?

Liability Coverage: Covers injuries and property damage to others resulting from an accident. Many states require this coverage by law; however, each state has its own minimum liability requirements.

Collision Coverage: Covers damage to your vehicle in the event of an accident. Collision coverage is generally optional unless your car is financed or leased.

The most common coverage that is not included within your own automobile insurance policy is “loss of use.”  

Loss of use is further explained in the following example: If you are involved in an automobile accident in a rental car, you will be responsible for the “loss of use”  the rental car company experiences as a result of not being able to rent the car while it is being repaired. Therefore, if the car you damaged takes three days to repair, the rental car company may charge you the rental fee for those three days that the car is out of use. However, if you purchase the extended coverage through the rental car company, “loss of use” is often included and as a result may be waived as a fee.