Can You Rent a Car Without Insurance?

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Can You Rent a Car Without Insurance?

When renting a car, the rental agency tends to offer a litany of extra, optional coverages. These jack up the cost to rent the car, but are they necessary? If you don’t understand how your car insurance covers rental cars, or if you don’t have car insurance at all, you might be wondering what you should buy.

Let’s take a look at everything you need to know about renting a car without insurance, renting a car with insurance, and how insurance deals with rental car damage.

Can You Rent a Car Without Insurance?

You can rent a car without having your own car insurance, as rental cars usually come with a minimum amount of liability coverage. If you pay with a credit card, your card provider likely contains some form of rental car protection, too. If you have your own car insurance policy, your coverage should extend to your rental car in the United States. 

Every state mandates drivers to have a minimum amount of liability coverage to protect other drivers on the road in case you cause an accident. Even though car insurance tends to follow the car, not the driver, the situation of renting a car is a typical exception to this rule. 

Your liability coverage can follow you since it’s not contingent on the type of car you’re driving like other auto coverages are. Your amount of liability on the road remains the same depending on what state you’re in –  whatever that state’s minimum required coverage is – because it’s supposed to cover other people you may wreck in an accident, not you.  

This means the same limits and deductibles that apply to your car should also apply to a car you rent. If you don’t have personal car insurance, rental cars typically come with liability coverage, although it’s usually just the state minimum amount. 

Usually, the cost of liability insurance is already factored into the rental car rate, so it’s not like you’re paying “extra” for it. But, this can vary by state. In Texas, for example, if you don’t have your own car insurance when renting a car, the cost of getting liability insurance from a rental car company is an additional cost.

If you have collision and comprehensive coverage, this will likely follow you to your rental car, too (again, an exception to the car insurance following the car rule). This means you’ll be covered from many of the forms of damage that you’re normally covered from when driving your own car, like theft. You may want to double-check with your carrier beforehand, though, just to make sure.

If you book a car rental without insurance of your own and your credit card doesn’t provide any coverage, you’ll need to rely solely on the rental car company. In addition to their liability coverage, you may want to buy a collision damage waiver, or loss damage waiver, to protect against physical damage to your car.

It’s important to note, too, that this information only applies to regular passenger vehicles. If you’re renting a truck, like a U-Haul, different coverage rules apply.

Do I Need Proof of Insurance to Rent a Car?

You don’t usually need proof of insurance to rent a car because you don’t need personal car insurance to rent a car. If you don’t have coverage, the rental car company will offer you some.

The typical requirements to rent a car are a driver’s license and a way to pay. Rental car companies typically require you to pay with a credit card when you get a vehicle. They do this because if you damage the car, they usually charge you for it upfront and then settle the matter with the relevant insurance companies later.

As a result, many credit card companies offer collision coverage when you book rental cars to encourage you to use their card, giving them business. This protection may cover physical damage to your car, no matter who’s at fault, and some charges that the rental car company may put on you in the aftermath of an accident.

If you want to use a debit card to book, then the rental car agency may ask for your insurance. If you do get in an accident and you only have a debit card on file, there’s no guarantee that you have enough in your account to cover damages if the company needs to charge you. So, they’ll either ask for a credit card too, or ask for proof of insurance to know that you have further financial backing for your rental.

Most states want you to be at least 25 years old to rent a vehicle, too. Other than that, you don’t need your own car insurance when renting a car because you can get some from the agency at the counter. 

Check with your credit card company before you rent to know what’s covered and not covered so you can decide what to get from the rental car company. In some instances, a credit card will only act as supplemental coverage, meaning you need to have your own liability insurance in place before it kicks in.

What Happens if You Crash a Rental Car Without Insurance?

You have a lot of options to get some sort of coverage before driving your rental car. Here are a few scenarios that may help you determine what your expenses will be after a rental car accident depending on your insurance coverage:

  1. You don’t have a personal auto insurance policy and you decline the rental agency’s coverage. This is a potential worst-case scenario.

With no insurance at all, you’d be responsible for paying most or all of the damage done to your car and potentially other vehicles (and injured people) if you cause an accident, which could be financially devastating.

  1. You have your own auto insurance policy and decline the rental agency’s coverage. In this case, your personal auto policy may step in to cover the cost of damage done to the vehicle, minus your standard deductible.

If another driver causes the accident, their liability insurance should pay for the damage. But, the rental car company may charge your credit card up front, and then put the burden on you and your insurance provider to receive reimbursement from the at-fault driver’s insurance. 

  1. You have your own auto policy, and you pay for additional coverage from the rental agency. If you have your own coverage and you pay for extra coverage from the rental company, like a loss or collision damage waiver, you should be safe from most, if not all, charges in case of an accident.

Your liability coverage would cover injuries and damage that you cause to others. Either the collision damage waiver or your full auto coverage should cover the rental car damage. And, Personal Injury Protection (PIP), or a related option offered by the rental company, could cover you and your passengers’ injuries if needed.

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The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.

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