Does My Insurance Cover Rental Cars in New Jersey

Have you ever been asked if you wanted to buy “insurance” to cover your rental car? If you’re a frequent flyer and travel a lot for personal leisure or for business, you’ve probably been through the rental car process several times. But if you’re a rental rookie, you might be puzzled when presented with the option to purchase “insurance” for a rental car. Maybe you’ve rented a few times and you still aren’t sure. Does your insurance already cover rental cars? When it comes to insuring yourself and the car you’re driving (even if it’s a rental) you want to be confident about the answer to this very important question.

Is It Smart to Purchase Rental Car Insurance?

It is important to note that most auto insurance policies may extend liability coverage for rental cars. This means that if there is physical injury or property damage suffered by others resulting from an accident that you cause, your personal auto policy may protect you when you’re driving a rental car. Even so, if you’ve ever had to rent a car, you probably remember the “insurance” sales pitch from the rental person at the counter. Although there may be slight differences between the coverage that rental car companies offer, there are typically four different options:

  • Collision Damage Waiver (CDW) – waives your responsibility if you damage the rental car
  • Personal Accident Insurance (PAI) – provides coverage for medical bills you and your passengers incur when injured in an accident involving the rental car
  • Supplemental Liability Protection (SLP) – provides additional liability coverage (over any other liability coverage you may have for auto accidents) when damaging others’ property or causing injury to others
  • Personal Effects Coverage (PEC) - covers your items stolen from or damaged in a rental car

Does this sound familiar?

While these coverage options may seem like a good idea, it’s important to realize that most of this extra insurance usually mimics the car insurance coverage that you already have in place and simply tacks on an unnecessary, redundant expense. However, if you do not carry comprehensive and collision already, you will want to consider purchasing the rental car policy, or their collision damage waiver if sold separately, in case the rental car itself sustains damage. An incident as minor as another vehicle backing into your parked car while you are off touring or shopping would likely cost you much more than the daily cost of adding the rental agency’s insurance or collision damage waiver. To clarify, if you do already carry comprehensive and collision on your existing auto policy, those coverages will most likely extend to the rental car.

Check the Details in Your Insurance Policy

Generally speaking, there are three primary reasons most of us will rent a car, which include replacement of your vehicle when out of commission, corporate travel or leisure. Whatever the reason may be, use this rule of thumb: if you’ve purchased the coverage on your existing car insurance policy, it may extend to your rental car. So check your policy if you need a refresher on what you have purchased.

Check With Your Credit Card Company

Are you paying for the cost of your rental car with a credit card? Depending on the credit card, you may have the same coverage (built in with the transaction) that you’re being offered by the rental car company. Keep in mind the rental would need to be in your name and paid for with that particular credit card. Oftentimes your insurance carrier will pay for the cost of an insurance replacement rental if that’s a coverage option in your insurance policy.

Also, your employer probably pays for the cost of your rental car if you’re traveling for business. Regardless of which entity pays for the final cost of the rental, most rental car companies will still require a major credit card from you for security purposes during the check-in process. It’s best to check with your credit card company about their policy on offering coverage for your rental. Keep in mind this is secondary coverage in addition to the primary insurance protection you may have with your auto insurance carrier.

Expenses That May Not Be Covered by Your Policy

As a wise consumer, you should know the difference between insurance coverage options and expenses associated with renting a vehicle. Even though your car insurance policy will most likely extend to a rental car, there may be some potential expenses that your car insurance policy will not cover, such as administrative fees, loss of use fees or additional mileage charges. For example, if you have a mileage limit of 50 miles per day and you go over, you may owe the rental car company a charge as high as 20 cents per mile over your allotted daily mileage.

What If the Rental Agent Says It’s Required?

Sales tactics employed by rental car companies have been widely used by their agents to sell their own form of coverage. For example, you may be presented with a question such as, “Would you like the standard coverage or the full coverage?” This is a common, indirect tactic to sell the collision damage waiver with their personal injury protection as “standard” coverage or these two combined with the supplemental liability protection as “full” coverage. Instead of asking you a yes or no question, such as “Would you like to buy extra insurance?” an assumed purchase approach is a not-too-uncommon tactic taken by rental agents to lead you into buying something you probably don’t need. Remember that purchasing “rental insurance” is optional if you carry full coverage on your personal auto policy. That being said, buying rental car insurance when your existing primary car insurance policy does not include comprehensive and collision coverages may be a wise choice.

Closing Thoughts on Rental Car Insurance

While there’s nothing legally wrong with rental car companies offering their own version of car insurance, know that this is generally a redundant purchase. If you have questions about your insurance coverage and how it would pertain to renting a vehicle, call Plymouth Rock Assurance. Plymouth Rock has been insuring NJ residents for over 35 years and is committed to finding personalized solutions for your coverage needs. With exceptional service, custom policies and dozens of additional ways to save with exclusive affinity programs, Plymouth Rock is a widely trusted auto insurance carrier in New Jersey. Call Plymouth Rock today!

Plymouth Rock Assurance® and Plymouth Rock® are brand names and service marks used by separate underwriting, managed insurance, and management companies that offer property and casualty insurance in multiple states. Insurance in New Jersey is offered by Plymouth Rock Management Company of New Jersey on behalf of High Point Property and Casualty Insurance Company, Palisades Insurance Company, Palisades Safety and Insurance Association, Rider Insurance Company and their affiliates. Each company is a separate legal entity that is financially responsible only for its own insurance products. Actual coverage is subject to the language of the policies as issued by each separate company.

Call 855-993-4470, get your free quote online, or find an agent to find out if your insurance covers rental cars in New Jersey. If you need additional information it can be found on our Contact Us page.