Does your regular car insurance policy cover you when driving a rental car on vacation or work?
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Asked July 6, 2011
Most personal auto insurance policies will automatically transfer to cover a rental vehicle used for trips or vacations, allowing the policyholder the freedom to rent a larger or more efficient vehicle for the sole purpose of a vacation or medical emergency. Keep in mind that car insurance is regulated on a state by state basis, and each company will have a different set of rules to follow where rental vehicles are concerned, so check your policy for specific details.
In most cases, a rental vehicle that will be used for work, including as a taxi, courier, or to deliver materials, is not covered under your existing insurance policy. For insurance companies, a business vehicle is a much higher risk and they are reluctant to extend your personal coverage to rental vehicles. Instead, you can purchase supplemental coverage on the rental vehicle that reinforces your personal coverage and makes it more suitable for business use and less risky for insurance purposes.
In some cases, the rental agency may still require you to purchase a Collision Damage Waiver, which protects their investment against theft, vandalism, and collision. This reuirement will depend on the rental company procedures and your own insurance company's rules, so find out exactly what your personal insurance policy covers before you purchase additional coverage from the rental agency. If you are unsure, call your insurance company and ask them what the best course of action would be and you may find out that you can purchase a low-cost rider to supplement your own policy cheaper than purchasing one through the rental company.
Answered July 6, 2011 by Anonymous