If you are on the look for an auto insurance policy for a short period of time, there is a big likelihood that you don’t even need to buy it…
Is car insurance for a short period of time required when renting an automobile?
The rental car company will offer you either a loss damage waiver (LDW), personal effects insurance, liability coverage, or accident coverage. If you already have you own car insurance, you likely don’t need any of these additional insurances. Just make sure to use the rental car for recreational use and not business use.
Below is a list of the 4 insurance types that the rental car company may offer you and why you probably don’t need them…
Liability coverage: The liability insurance that you already have pays for any damages, which you are found to be liable for.
Loss Damage Waiver (LDW): Collision & comprehensive insurance (if you have them on your car), makes this coverage superfluous. Your collision insurance pays for damages to your auto regardless of who is at fault in an accident. Comprehensive insurance protects you from damage or loss caused by everything from the weather to burglary.
Personal accident coverage or accident insurance: This type of insurance from rental car companies is health related. If you already have Personal Injury Protection (PIP), health insurance, or Medical Payments coverage, this type of insurance is unnecessary.
Personal effects coverage: This type of coverage protects from the loss of personal items or baggage. If you have homeowners or renters insurance, you likely do not need this coverage as both types of home insurance also cover belonging outside of your house.
To be 100% safe, you should try calling your house and car insurance provider so that you are sure that they both will carryover their coverage to the rental car. You may get some form of coverage from your credit card if you use it to pay for the rental.
What if you’re borrowing somebody’s car?
If you already have your own auto insurance, you don’t have to worry. Also, the car insurance of the lender will transfer over to you. What if you want to borrow someones car and don’t have your own coverage?
Lack of liability coverage is the main thing, which can hurt you, if you are borrowing somebody’s car. If the lenders liability coverage is not enough (say it is $4,000 short of paying for the damages), you are responsible for the difference in an accident in which you are found to be guilty. You don’t have to worry about this happening if you get a nonowners policy, which provides liability coverage for those who borrow others cars. And, as always, if you are the innocent party in an accident, the guilty one will pay for the repairs (this isn’t the case in every state as some are no-fault states).
If you borrow somebody’s auto, who is going to pay for damage done to the lenders car? If the owner of the car has collision and/or comprehensive insurance, they will pay. You may pay if you have these two insurances.
