Rental Car Insurance Explained

Rental Car Insurance Explained

Rental car insurance is definitely one of the least fun and most complicated parts of renting a car. Do you even need rental car insurance? What does rental car insurance even cover? Does your personal insurance policy cover you at all? These are all great questions we’ll answer while making rental car insurance a bit easier to understand. We’ll also show you a cool trick to get insurance included in your car’s daily rate.

Do this Before Getting Rental Car Insurance

  1. Check your personal auto policy (if you have one)–some car insurance policies cover you while you’re renting a car. You should be able to read a copy of your policy or contact your car insurance provider to check.
  2. Check with your credit card provider– it sounds odd, but many credit cards provide a basic amount of car rental insurance as part of their rewards. This is especially true with travel-based rewards cards

Traditional Car Rental Insurance Explained

Whether you’re booking online or at the rental car counter about to grab the keys, you’re going to have options for rental car insurance. They’re usually broken up into three or four separate plans with varying degrees of coverage and pricing including:

Loss damage waiver or collision damage waiver

Covers any damage due to a wreck, stolen parts, or a stolen car.

Do you need it? If your own policy has collision and comprehensive coverage it usually extends to a rental car in most states (note – you will still have to pay for your deductible). Additionally, most premium credit cards (I.e. gold and platinum cards) will provide this coverage. If you don’t have collision and comprehensive coverage and opt-out of the loss damage waiver, you are responsible for any damage.

Liability coverage

Covers damage to other people or vehicles affected by an accident.

Do you need it? If your personal auto policy covers above the minimum amounts, the majority of the time your personal liability coverage will extend to rental cars.  

Heads up– this supplemental liability coverage from rental companies often covers significantly more than most personal auto policies do. If you think you might need more coverage for your rental than you normally would for your own car, consider adding on liability coverage.

If you don’t have a personal auto policy, you might want to consider getting rental car insurance in the form of liability coverage.

Personal effects coverage

Protects any personal items stolen from the car.  

Do you need it? If you have a homeowner's policy, typically you will be covered in the event that a personal item gets stolen from the car. This form of rental car insurance is a good idea if you are worried about keeping high value items like jewelry or electronics in your car.

Personal accident insurance

Protects you & other passengers in the car if you are affected by an accident.  

Do you need it? A majority of the time, your health, life, or auto insurance policies will already cover these damages.  

For both personal effects coverage and personal accident insurance, your policy will pay first until the limit has been reached at which time the coverage's will pay the remainder.  

people discussing over laptop

Let's Talk Pricing

Rental car insurance coverage is usually priced on at an additional daily rate. More coverage means more money. It’s best to check your personal auto policy, call your insurance agent, or look at your credit card benefits before purchasing any insurance on rental cars.  

What About Insurance for Car Sharing?

Car sharing insurance works just a little differently than traditional rental car insurance. Still, it depends on the company. Turo drivers are not required to buy insurance. Instead, plans are available and are priced as a percentage of your total trip price. Other companies, like Zipcar and Getaround include insurance, but not from large insurers like Allstate. Zipcar members are also responsible for the first $1,000 of any accident where they’re at fault. That’s a pretty hefty price to pay in case of the unexpected.

toy cars on contract

Avail: Coverage from Allstate Included

Every car from Avail comes with insurance from Allstate included. There’s no need to worry about selecting a plan or paying extra. Coverage means protection for the car, other passengers, and yourself in case of an accident. For borrowers, this coverage is excess over any other insurance that may exist.* We also provide 24/7 support and roadside assistance for those extra-large bumps in the road.

If Avail’s insurance pays to repair the damage and you are found to be at fault** for damage to the vehicle, you may be responsible for a $500 deductible. If another insurance policy (e.g. your personal auto or credit card policies) pays to repair the damage, then they may have different deductibles that apply. For questions about whether your personal auto policy or credit card policy may apply, please contact your insurance provider or a licensed insurance agent.

The Bottom Line

When it comes to rental car insurance, Avail never makes you choose between the best deal and being protected. That eliminates so much guesswork and worrying about ‘what-ifs’. Even better, you get insurance and roadside assistance from one of the most trusted names, Allstate. Happy sharing!

Want the nitty gritty insurance details? Learn more about car sharing insurance.

*Through June 19, 2022, Avail will provide primary liability coverage for borrowers, up to $1 million. Effective June 20, 2022, Avail’s insurance coverage for borrowers will be at the level described above and excess over any other insurance that may exist.

**Fault will be determined by Allstate claims after a claim is submitted.