Does My Auto Insurance Cover Rental Cars?

When it comes time to rent a car, here are two common questions that customers often ask us:

• Do I need to buy the insurance offered by rental car companies?
• If I am in a car accident and need to rent a car, am I covered?

Let’s find out the answers.

Insurance Offered by Rental Car Companies

You’re standing at the rental car counter and the person helping you asks if you want to buy insurance through them. Do you need it?

This is a great question to ask your ERIE agent before your next vacation. (After all… no one wants to wonder if they’re covered for getting rear-ended when they could be working on their tan.)

Ultimately, the decision is up to you. There are some advantages to saying yes. Often, getting a rental means you’re driving an unfamiliar vehicle in an unfamiliar area, so the supplemental coverage from the rental car company can give you extra peace of mind.

Before you accept or decline, it’s important to understand how the rental car company’s coverage can (and can’t) kick in. Every rental company handles things differently. Your ERIE agent can also explain some important details, like how the rental company might calculate loss of use. You should know what you’d be on the hook to pay after a claim, including the deductible as well as any administrative fees that may apply.

With that in mind, here are a few questions to ask your ERIE agent before you plan on renting a car:

• If I buy the rental company’s coverage, then have a claim – will that prevent me from having to pay a surcharge on my personal auto policy?
• If I’m in an accident, will the coverage help me pay for a replacement rental car while this one’s in the shop?
• If I decline the extra coverage, then have a total loss… would the rental company max out my credit card until my personal auto policy pays for it?

Again, the decision is up to you. If you choose to decline at the rental counter, know that your personal auto insurance can kick in to cover you in certain situations while you’re driving your rental. Your ERIE policy should have you covered for liability claims, but your ERIE Agent can tell you for sure. Additionally, if you opted in to have collision and comprehensive coverage, you may also be covered for damage to the rental car. Auto insurance from Erie Insurance is designed to suitably protect you and your family for incidental use of a car that’s not your own, such as a short-term rental of less than 45 days. The coverage extends to cars in the U.S. or Canada. That said, it’s a good idea to check with an insurance advisor like an ERIE agent beforehand since auto policies vary from person to person.

Here are a few questions to ask your agent about insurance and rental car coverage:

Q: When I rent a car for a combined business trip and a personal vacation, am I covered?

A: Your personal auto policy may not cover you, but your employer’s insurance might.

Q: If more than one person is driving the rental car, am I covered?

A: Your auto insurance likely only covers individuals that are on your policy, such as spouse or kids. So, in this scenario, coverage from the rental company could be a good idea.

Q: If my luggage, purse or personal possessions are stolen out of my rental car, am I covered?

A: Maybe. This depends on the details of your individual auto policy. In many cases, personal property may be covered by a homeowners or rental insurance policy, but not by your auto insurance. It may be worth asking an associate from the rental company what their policy is regarding personal property stolen from their vehicles.

Another option to consider: Many credit card companies offer rental car insurance if you pay the rental fee using their card. Just know that this coverage typically only covers physical damage to the rental car, so you’ll still need separate liability coverage. Get in touch with your credit card company to ask for details.

With liability coverage, there are a few things you should consider. Most states have a required minimum amount of liability coverage, which rental car companies are required by law to offer, but that still may not give you enough protection. If you have personal auto insurance and have opted for higher liability limits, you’ll be better protected.

Insurance for Renting a Car After an Accident

If your car needs to be in the shop for a while after an accident, you may need to rent a car. Most auto insurance policies offer rental reimbursement coverage for a nominal extra charge, but sometimes auto insurance shoppers skip adding it to their policies.

With ERIE, basic rental car coverage is automatically included in most states if you’ve purchased comprehensive coverage. That means if your car is disabled because of a fire, theft, glass damage or another comprehensive type claim that may be covered under your policy, you’re covered for a compact sedan rental car. If you need a bigger rental vehicle, you could buy additional coverage (details below).

Related: When is a car considered “totaled”… and what happens when it is?

To have rental car coverage while your vehicle is being repaired from collision losses, such as hitting another car or a fence, building or pole, you would need to purchase collision coverage and add the rental car coverage to your policy.

At ERIE, this add-on coverage is called Transportation Expenses. It allows you to select a class of vehicle you want. It’s a nice benefit, because if you are a family of six… a compact sedan is probably not going to work. There are six classes* from which to choose:

• Class 1: Compact sedan
• Class 2: Traditional sedan
• Class 3: Small SUV or pickup truck
• Class 4: Minivan or midsize SUV
• Class 5: Luxury sedan or large SUV
• Class 6: Specially equipped vehicle that can be operated and accessed by an individual with a disability.

Is Turo Covered by Insurance?

Looking for a rental with a personality that matches yours? Turo (formerly RelayRides), is a carsharing platform that allows car owners to ‘host’ their vehicles, cutting out the rental counter and adding a more personal feel to your rental experience. While auto coverage with ERIE will cover you if you are renting a car through Turo, it will not if you are hosting (i.e. renting your vehicle out). A rental through Turo would also be covered under Transportation Expenses as a temporary substitute after an accident.

With that in mind, it's easy to add rental car expense coverage to your auto insurance policy. Just ask your agent to add Transportation Expense Coverage. And, while you’re at it, consider adding Emergency Roadside Service Coverage. Insurance rules vary by state, so it is best to check with a trusted insurance advisor to review the specifics of your auto policy. Contact your local ERIE agent to help you determine what best meets your needs.

This story was originally published in 2018. It was updated with new information on April 29, 2019.

*With ERIE, you can choose from six classes of rental car options, each with a corresponding premium rate. North Carolina and Virginia offer a monetary reimbursement subject to purchased limits of coverage. Rental car classes do not apply.