Before renting a car, it's important to know the answer to the question, "Will my car insurance cover liability on a rented vehicle?" The answer is a bit more complicated than a simple yes or no.
Will My Car Insurance Cover Liability on a Rented Vehicle
Many people rent cars for vacation or business travel. As you approach the counter, the rental agent may ask you if you wish to sign for insurance on the rented car. Should you? What are you options?
Your Current Car Insurance
Some automobile insurance policies do cover rental vehicles, but each policy varies. The only sure way to know is to read your policy or call your agent or carrier and ask. It's a good idea to make the call before you're standing at the rental counter. If you know you will be traveling, call a few days ahead of time and ask whether or not your current automobile coverage extends to liability on a rented vehicle. Coverage also varies among the different states, with some states insisting that liability insurance carries over to rented vehicles. That's also why it's important to check with your specific agent or carrier.
If you cause a car accident while you are driving a rented car, liability insurance generally does cover the damages to the other vehicle and medical expenses up to the limits of your policy. However, if you have any other insurance through your credit card or another type of insurance on the rented car, that will be tapped into first before your personal automobile policy liability insurance takes effect in the claim.
Many credit card companies offer as a standard benefit additional insurance when renting a car when you use the credit card to rent the vehicle. Check your specific credit cards, the offer and benefits you received. If that's the case, then you have extra protection in addition to your personal automobile insurance for a liability claim. Again though, it really depends on your individual credit card and what they provide in terms of coverage.
"Will my car insurance cover liability on a rental vehicle?" you may ask, and the answer is yes - usually. If you're traveling on business, the answer is more complicated. Some companies carry additional insurance policies to cover employees traveling on business. Human Resources, accounting or your company's travel office -if you have one- will advise you on their specific requirements. Some may advise you to not accept optional insurance on rental cars because already have adequate rental car coverage.
What Insurance Does Not Cover
People often hear the word "vehicle" and think that their automobile insurance should or could cover other vehicles, such as snowmobiles, boats, scooters, jet skis and the like. Other vehicles such as these should be covered under a separate policy. If you rent such vehicles while on vacation and cause an accident, your automobile liability policy is unlikely to cover the damages to the other person's property or their medical bills.
Read the Fine Print and Ask Questions
The bottom line to the question of "will my car insurance cover liability on a rented vehicle" is to read the fine print on your rental contract and ask questions. Ask your insurance company first whether or not your specific policy covers rental cars, and ask your credit card company whether they have any type of coverage if you use the card to pay for the rented vehicle. Talk to your agent and check all the ramifications of your insurance decision. While it would be wonderful to have a clear cut "yes" or "no" answer to this question, differences in insurance policies, state regulations, and even the method of paying for the rental car can affect coverage and change the answer.