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Do I Need Rental Car Insurance?

Whenever you have rented a vehicle from a rental car company, have you been overwhelmed with the legal wording in the contract?

When the car rental agent asks the question, “Would you like to purchase insurance or sign a waiver?” are you unsure how to respond?

Do you know if your personal automobile policy provides rental car coverage? What if my child who resides with me wants to rent a vehicle; does my policy provide coverage for him or her to rent the vehicle?

A Pekin Insurance® personal automobile policy provides coverage for a vehicle rented by an “insured” as a temporary substitute vehicle. An insured is defined as the individual named on the policy, their spouse (if a resident of the same household), and any resident relative.

The coverage provided is the broadest coverage carried on your personal auto policy. If you only carry liability insurance, then your personal auto policy will pay up to your policy limits for an accident where it is determined the insured is legally liable. For the policy to pay for the damage caused to the rental car itself, you must carry physical damage coverage on an owned vehicle.

The personal auto policy only provides liability and/or physical damage coverage. The personal auto policy does NOT provide coverage to a rental vehicle for the following losses:

  • Diminution in value – the monetary difference between a car’s pre-accident value and the car’s value after an accident and repair.
  • Valet Parking – when a rented vehicle is being parked by a valet.
  • Loss of use to the rented vehicle.

The above coverage may be added to your Pekin Insurance personal automobile policy with the purchase of our Auto Guard endorsement.

Knowing what coverage your policy provides should give you the confidence that you will make the correct decision about the purchase of insurance the next time you need to rent a vehicle as a temporary substitute for a vehicle you own.

Becky
Senior Personal Lines Research & Development Specialist
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