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Does My Auto Insurance Cover Rental Cars?

Row of rental cars on a sunny day

When it comes time to rent a car, here are two common questions that customers often ask us.

  • Do I need to buy the insurance offered by rental car companies?
  • If I am in a car accident and need to rent a car, am I covered?

Let’s find out the answers.

Insurance offered by rental car companies

You’re standing at the rental car counter and the person helping you asks if you want to buy insurance through them. Do you need it? In most cases, you probably don’t need to buy the insurance offered by rental car companies. Your personal auto insurance will have you covered for liability claims and, if you have collision and comprehensive coverage, for damage to the rental car.

For example, Erie Insurance’s auto coverage is designed to suitably protect you and your family for incidental use of a car that’s not your own, such as a short-term rental of less than 45 days. The coverage extends to cars in the U.S. or Canada. That said, it’s a good idea to check with an insurance advisor like an ERIE agent beforehand since auto policies vary from person to person.

Here are a few questions to ask your agent about insurance and rental car coverage:

  • When I rent a car for a combined business trip and a personal vacation, am I covered? (Your personal auto policy may not cover you, but your employer’s insurance might.)
  • If more than one person is driving the rental car, am I covered? (In this scenario, coverage from the rental company could be a good idea.)
  • If my luggage, purse or personal possessions are stolen out of my rental car, am I covered? (Personal property may be covered by a homeowners or rental insurance policy.)

Many credit cards also offer rental car insurance if you pay the rental fee using their card. Just know that this coverage typically only covers physical damage to the rental car, so you’ll still need separate liability coverage. To get all the details, get in touch with your credit card company.

With liability coverage, here are a couple things to consider. The state required minimum amount of liability, which rental car companies are required by law to offer, may not give you enough protection. If you have personal auto insurance and have opted for higher liability limits, you’ll be better protected.

Insurance for renting a car after an accident

If your car needs to be in the shop for a while after an accident, you may need to rent a car. Most auto insurance policies offer rental reimbursement coverage for a nominal extra charge, but sometimes auto insurance shoppers skip adding it to their policies.

With Erie Insurance, basic rental car coverage is automatically included in most states if you’ve purchased comprehensive coverage. That means if your car is disabled because of a fire, theft, glass damage or another comprehensive type claim that we may insure, you’re covered for a compact sedan rental car. If you need a bigger rental vehicle, you could buy additional coverage (details below).

To have rental car coverage while your vehicle is being repaired from collision losses, such as hitting another car or a fence, building or pole, you would need to purchase collision coverage and add the rental car coverage to your policy.

At ERIE, this add-on coverage is called Transportation Expense coverage. Instead of a daily limit, you select a class of vehicle you want, which is really nice because if you are a family of 6, a compact sedan is probably not going to work. There are five classes1 from which to choose:

  • Class 1: Compact sedan
  • Class 2: Traditional sedan
  • Class 3: Small SUV or pickup truck
  • Class 4: Minivan or midsize SUV
  • Class 5: Luxury sedan or large SUV

It's easy to add rental car expense coverage to your auto insurance policy, and it can be a good deal, especially if your car is in the shop for an extended period. Insurance rules vary by state, so it is best to check with a trusted insurance advisor to review the specifics of your auto policy. Contact your local ERIE agent to help you determine what best meets your needs.

1 With ERIE, you can choose from five classes of rental car options, each with a corresponding premium rate. North Carolina and Virginia offer a monetary reimbursement subject to purchased limits of coverage. Rental car classes do not apply.