Does Auto Insurance Cover Rental Cars?

The short answer is, of course, “it depends”. What are YOU covered for? Read our handy guide below:

1. Where are you renting? If you have full coverage (including comprehensive and collision) on your auto policy in Texas, and you are with a high-quality, reputable company like Safeco, Travelers, or Progressive, then insurance coverage will likely extend to your rental car anywhere in the United States. However, it’s a different story overseas. Countries such as Mexico have their own laws and requirements, so if you’re heading abroad you’ll almost certainly need to purchase additional insurance.

2. What kind of car are you renting? Own a small SUV in Houston, rent a small SUV in Utah … usually no problem with your rental being automatically covered under your auto policy. Normally drive a 2003 Toyota Corolla, but rent a Ferrari 488GTB to drag race down the strip in Vegas on your bachelor party weekend? You could have problems. Moral of the story: if in doubt, get the insurance offered by the rental company.

3. Have a good credit card? Sometimes – but not always – this can fill in any “gaps” in coverage that your personal auto policy cannot provide, including CDW (see below).

4. Live in a house? Your personal belongings are likely covered under your homeowners, renters, or condo policy – even while they are lying on the back seat of a rental car. Of course, everyone knows that leaving valuable items unattended in a vehicle is a bad idea, but you get the picture.

5. Don’t forget the CDW Collision Damage Waiver (also known as Loss Damage Waiver) is not an insurance product, but a waiver that means the rental car company – not you – is held responsible in the case of damage of theft. Among other things, the CDW will cover loss of use and diminished value to the rental car, which can add up to thousands in the event of a major accident and won’t be covered under your auto insurance.

6. Relax! Finally, when purchasing insurance with a rental car company, it is almost always both easier and cheaper to purchase it in advance … NOT at the rental car desk when you arrive tired and frazzled after a long flight!

Happy and safe travels from Memorial Insurance!