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You Might Need Car Rental Liability Insurance: Here Is Why

If you are renting a car for a few hours, a few days or even longer, you are going to be asked to buy car rental liability insurance. Before you pay the cost of insurance through the car rental agency, consider whether it would be more cost effective to get your own car rental liability insurance through your auto insurance agent.

What Is the Risk if You Do Not Having Car Rental Liability Insurance?

All drivers must have auto insurance in nearly every state- whether they own the vehicle or not. Borrowing a friend’s car without asking about insurance coverage is bad enough, but not having some kind of coverage on a car you are renting is even worse. Before you drive away from the car rental place with a vehicle, make sure it is covered. Here are some major reasons why:

  • In the event of an accident, you may be forced to pay out of pocket for the vehicle itself as well as anything else damaged in that accident.
  • Most car rental companies have large legal departments, which will keep them from paying anything- again, leaving you with that cost to handle.

Why You Are Not Protected if You Don’t Specifically Buy This Coverage

If you think that you do not need car rental liability insurance because you paid with a credit card, think again. While credit cards do provide some protection for certain risks, this is one area that is a huge misconception.

  • Credit cards do not provide protection for a car rental. You are not making a purchase; it is a rental.
  • Your own auto insurance may provide your protection for a rental car, that is if it carries you as the driver for any vehicle. But there are things that may make this tricky as well. Certain policies are written for you specifically as the only driver. If someone else drives the car and gets into an accident, the policy can be voided.

Choosing Car Rental Liability Insurance if You Are Not a Car Owner

Not everyone who is a licensed driver actually owns a car. If people who do not own a car want to rent a vehicle, how do they protect themselves in the case of an accident?  Just because you do not have a car does not mean that you cannot get an auto insurance policy. But, before you do so, there are some things that you should know.

  • You can buy a policy called a “non-owner insurance policy” These policies are written for a specific term, not per rental.
  • If you know that you are going to use a rental car for an extended period of time, it is worth the extra effort to shop around for low rates and best terms.
  • If you cannot find the right non-owners insurance term for your needs and will only be renting the car for a single use or only one day, you may have to consider getting the rental insurance from the rental company. It is expensive but less costly than being sued.