Do you need proof of insurance to rent a car?

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Things to Remember...

When you reserve a rental car, you’re quoted a daily rate for the rental. After everything is said and done, you’ll end up paying that daily rate plus fees and taxes when you’re at the rental counter.

One of the products that rental agents are trained to push is supplemental insurance coverage. It’s a product that costs the customer extra money and that’s rarely used.

Surprisingly enough, several renters elect to pay more to buy coverage and damage waivers.

You’re not required to purchase the insurance, but if you don’t understand how your insurance works, your fears of having an uninsured loss could force you to spend money when you don’t need to.

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Here’s your guide to insuring a rented car:

Do auto insurance laws apply when you’re renting a car?


It’s your legal duty to insure automobiles that you own when they’re registered to be driven.

As long as your car has a valid registration, you should have insurance or proof of financial responsibility on file with the Department of Motor Vehicles.

If you fail to comply with the law in your state, your registration or license could be suspended.

While a rented vehicle is a temporary substitute, you don’t legally own it when you sign the rental agreement. Since you aren’t the registered owner of the vehicle, you’re under no legal obligation to insure it.

If you don’t carry insurance and you don’t buy supplemental coverage through the agency, you have no protection against lawsuits.

Who is obligated to insure a rental car?

You don’t have to have insurance, but the owner of the vehicle does. Vehicles that are available for hire have special rules.

Since they are part of a fleet, the agency will carry a special commercial policy that includes general liability protection and damage for each of the cars. Liability coverage doesn’t extend to protect you as the renter.

Can the rental company require that you have insurance?

State law doesn’t require you to buy the insurance products that you’re offered when you rental a vehicle. In fact, there’s no such thing as a state insurance requirement that applies to you or your spouse’s rental.

Unfortunately, many consumers don’t do their research and dishonest rental agents insist that insurance is a must.

If you’re armed with information, you’ll know that you can’t be refused a car because of insurance.

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The Importance of Having Coverage

No matter how optional insurance is, you should always carry coverage when you’re driving any type of car.

If you’re in an accident and you decide to save $20 by taking a risk, you’ll be stuck paying for the damage that you’ve caused on your own. This includes third-party medical bills, repair costs, and even legal defense costs if you go to court.

How does your current insurance protect you when you rent?


If you have an existing personal auto policy, there’s a provision under the policy will provide you with coverage while you’re renting a car.

The temporary substitute vehicle provision says that when you’re renting or borrowing a vehicle that you don’t own for an acceptable reason, your broadest form of coverage will extend while you’re driving the rental.

What does “broadest level of coverage” mean?

You should find out how much coverage you have before you assume that you have enough coverage to comfortably rent a car.

Under you auto contract, the insurer will pay up to the highest limits that you have on your policy. If one of your vehicles has full coverage insurance, the rental will as well.

Do you pay a deductible if you have a rental car claim?

If you have an accident in your rental car and you’re using your own coverage, the insurer will charge you whatever deductible you have on policy.

If you have varying deductibles for each of your cars, you’ll pay the lowest available option. If the damage doesn’t exceed the deductible, you will pay for the entire cost of repair.

What types of rental car coverage can you buy?

You don’t have to show the rental agent proof of your insurance. It’s you who is taking the risk if you do have a loss and you don’t have insurance.

If you don’t have your own policy or you’re not convinced that your insurance is enough, here are some of the supplemental options that you can pay for through the company:

  • Supplemental Liability Protection – pays for third-party damages and medical bills
  • Collision Damage Waiver – pays to repair the rental vehicle after a covered loss
  • Personal Accident Insurance – pays for medical bills, ambulance bills, and funeral expenses
  • Personal Effects Coverage – pays for the theft of your luggage or other personal effects

Are there drawbacks to using your own insurance?


Using your own insurance can keep rental costs down, but there are some drawbacks. The biggest one is that your insurer isn’t obligated to pay for loss of use.

The insurer can charge you for missed out rental income profits while the car’s being repaired.

If you’re not happy with your current insurance, you should start to price rates through other carriers. One quick way to do this is to use an online quoting tool that gives you instant quotes.

In as little as five minutes, you can find out if you’re getting a deal.

Enter your zip code below to compare car insurance rates that work with your budget today!

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