A car rental agency is naturally protective of its assets. People may not drive as carefully in a car they don’t own, which leads to accidents. Because the agency needs the damage repaired or the car replaced, it generally recommends renters buy its provided insurance policy.
When you rent a car, though, you may wonder if you need to buy this policy or if your existing policy will cover the rental.
“The answer is yes and no,” said State Farm agent Pam Hansen Alfred. “Are you renting in the U.S.? At State Farm, we don’t extend coverage to any country except Canada and 25 miles into Mexico. Otherwise, the way it works is, if you have comprehensive and collision on a vehicle, that coverage will extend to the rental car if you have a claim.”
For instance, Alfred recently had a client whose rental car was stolen, a situation that a comprehensive policy would pay for after a deductible. Similarly, if you were in an accident or your windshield was damaged, the cost of any repairs would be covered after you paid your deductible.
Beyond these situations, though, you should discuss a couple of unique areas of car rental insurance with your agent to ensure you’re covered.
Loss of use
While your insurance will cover damage to your rental car, you may be on the hook for other expenses if a car rental agency experiences loss of use.
“If you wreck a vehicle and they can’t rent it out, they charge you for the amount of time it is in the shop as though you were still renting it,” Alfred said. “This cost would not automatically be covered by your car insurance. But you can add a coverage under your State Farm policy called unowned auto liability and