Rental Car Insurance- to Buy or Not to BuyMaybe you are on a vacation and need to rent a car or maybe you need a rental car for another purpose. Rental car insurance- to buy or not to buy- that is the question most people are left asking themselves when it comes time to renting a car. The decision doesn’t need to be difficult as long as you know the facts.

Not All Rental Companies Are the Same

Depending on your need/usage for a rental car will depend on what kind of coverage you need or already have on an existing auto insurance policy. Typically, rental car companies will offer you three different types of coverage options. Deciding whether you need any or all of them is up to you. Be knowledgeable so you will make the best decision for YOU.

Loss Damage Waiver/Collision Damage Waiver

If your auto insurance policy has collision or comprehensive coverage, then it will transfer to the rental car, unless there is a specific exclusion cited, such as “business use.”  However, if you damage the rental vehicle, you may be responsible for more than just damages to the car. These damages may include your deductible, loss of use fees that the rental company has lost because the car was out of commission while repairs were being made, or administrative fees for someone to assess the damages and handle the details. You can end up spending a lot of money if you damage the car—even if you have great insurance coverage.

However, if you purchase the Loss Damage Waiver, you safeguard yourself from all of this, enabling you to walk away with no costs assessed to you. Whether you should purchase this coverage is entirely up to you because it can be rather costly. However, if you are involved in an auto accident in the rented car, then you have to decide whether you wish to be surprised with unexpected extra costs that could be incurred or walk away with a sense of security. If you do not have collision or comprehensive coverage on your auto insurance policy, you will have zero protection without purchasing the Loss Damage Waiver.

Liability Insurance Coverage

Liability insurance is designed to provide coverage for damages (bodily injury and property damage) that you may cause to a third party resulting from an auto accident. In the State of North Carolina, it is legally mandated that you have car insurance, which covers liability protection up to at least the minimum liability insurance requirements. Typically, this liability coverage will extend to your rental car, but some exclusions may apply so it’s important that you discuss this with your N.C. independent insurance agent to verify coverage. *Note that coverage from your N.C. personal auto insurance policy never covers a rental car for liability and physical damage when rented and used for business purposes.

If your have established that your liability insurance coverage will transfer to the rental car, then ideally, your car insurance should provide you with enough liability insurance to satisfactorily protect your finances in the event of an accident and you would not need to purchase this insurance through the rental car company. However, if for some reason you do not have any car insurance or your current insurance specifically excludes rental car coverage, then you would need to purchase liability insurance from the rental car company.

Medical Payments Coverage

Med Pay is designed to provide coverage for incurred medical costs (up to stated limits) for you and/or other passengers in your car if injured while driving the rental car. If you get injured in a car accident and accrue medical costs, your health insurance may not cover your expenses since typically car insurance will be primary. In North Carolina, medical payments coverage is an optional coverage so if your policy does include this coverage, it would transfer to your rental car, barring no exclusions on your auto policy. If you don’t have this coverage under your car insurance policy, then it is up to you if you wish to purchase it for the rental car.

Always Ask Your Independent Agent When In Doubt

The next time you are renting a vehicle and have any questions, Paramount Insurance Agency will assist you with your auto insurance coverage and give any advice. After all, your safety is our concern!