What to Do When Renting a Car & You Don’t Have Personal Car Insurance

What to Do When Renting a Car & You Don’t Have Personal Car Insurance

Million Mile SecretsWhat to Do When Renting a Car & You Don’t Have Personal Car InsuranceMillion Mile Secrets Team

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Million Mile Secrets reader Vivian writes:

I am in between purchasing a new car and don’t have personal car insurance.  I’m going on a business trip in California, which requires liability insurance.  Which specific credit cards provide auto liability insurance?

Please help me as the cost to me would be $15 a day over 6 weeks for auto liability from the auto rental agencies!

What To Do When Renting A Car And You Dont Have Personal Car Insurance
Unfortunately, the Highest Coverage Vivian Can Get With a Credit Card Is Primary Insurance NOT Liability Insurance

What’s Liability Insurance?

If you’re at fault in an accident, liability insurance covers damage to the property and injuries of others involved in the accident.

What To Do When Renting A Car And You Dont Have Personal Car Insurance
Liability Insurance Is Required in 49 States Including California

Your injuries should be covered under your health insurance plan, but it’s best to call and make sure.

However, any damage to the rental car will NOT be covered.  So you will have to pay for any damage to the rental car out of your own pocket.  Unless you purchase Collision Damage Waiver (CDW) insurance from the rental car company or get primary rental car insurance through your credit card.

Rental car companies usually cover the state minimum required liability insurance, but this is unlikely to provide significant protection.

Also, if your employer is sending you on a business trip, they should usually provide you with insurance.  But best to check with them!

What’s Primary Rental Car Insurance?

Link:   Should I Buy Rental Car Insurance?

Link:   13 Cards That Offer Primary Rental Car Insurance

The highest level of rental car coverage you can get with credit cards, is primary insurance.  Primary insurance is offered with several Chase cards, like the Chase Sapphire Preferred, Chase Ink Bold (business rentals only), and Chase Ink Plus (business rentals only).  You can also see my list of more cards with primary rental car insurance.

Primary insurance covers damage to the rental car, but does NOT cover injuries to others and their property.  Personal liability car insurance will usually cover damage to other property, cars, and others’ injuries.

These 2 types of insurance compliment each other.  This is why some folks can waive the insurance offered by the rental car company when they pay for their rental car with a card that offers primary coverage.

Having a personal car insurance policy usually means that you’re covered when you drive another car.  But always double-check!

What To Do When Renting A Car And You Dont Have Personal Car Insurance
NOT Having Sufficient Coverage Could Cost You!

Because Vivian doesn’t have personal car insurance, only the rental car damages will be covered when she waives the insurance from the rental car company and uses the primary insurance from her credit cards.

She will still be liable for the injury of others and damages to other cars and property.  This could potentially cost her MILLIONS!

Don’t Take the Risk!

Vivian can avoid taking such a big risk, by signing-up for supplemental insurance from the rental car company.  However, at ~$15 per day for 6 weeks this will cost her ~$630.

What To Do When Renting A Car And You Dont Have Personal Car Insurance
Make Sure You Are Covered!

Vivian may be able to save money by signing-up for a non-owners car insurance policy instead.  Non-owners car insurance provides liability insurance for folks who don’t have their own car, but still drive occasionally.

If Vivian has non-owners car insurance and pays for her rental with a credit card that provides primary car insurance, she may have liability coverage.

Vivian can call around for pricing to see if this is cheaper than paying for 6 weeks of insurance through the rental car company.

Bottom Line

Certain credit cards will give you primary rental car coverage, when you pay for the rental with your card.  But primary Collision Damage Waiver (CDW) insurance only covers damage to your rental car.

If you don’t have personal car insurance, you could be liable for the injury of others and their vehicles.  Totaled cars, ambulance rides, etc. will get extremely costly!

I love to save money wherever I can, but insurance is 1 place I don’t recommend folks cut corners, because the risk is too big.

So if you don’t have your own car insurance, it’s best to pay for the insurance offered by the rental car company.  And folks who rent cars frequently may save money by signing-up for a non-owner’s car insurance policy.

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I am a resident of California and am living partially out of the country. I sold my cars and did not keep car insurance. I am returning to California and have rented a car for a month. My AMEX has car rental insurance with no collision coverage. What are my options ?

I am in France with 3 month stay (no Long Term Visa). I shall rent a car with Sapphire Preferred card. I understand that primary liability coverage comes with Sapphire,

but does t hat mean headlights, windows and tires are covered for damage as well?

Europcar tries to sell me insurance for that plus any damage to rental car.

Sapphire does NOT cover Personal Liability Car insurance to other property, cars and other

peoples injuries. So will I be able to buy that here and what is it called in France?

Thanks in advance for guidance on this.

Your post focuses on getting the car at the counter while I would be more concerned about collecting on the insurance in the case of death or injury to others. If you said you were from the UK (and were not in reality) they probably will not pay claims.

There is also one trick that I have been using for years when I didn't have my own car - therefore I have to say that YMMV. The thing is that as long as non-US drivers normally do not have US liability insurance rental companies often offer SLI (Supplementary Liability Insurance) for non-US drivers by default and sometimes even free of charge. And here is the point - some European brokers (I tried it with auto-europe.co.uk and ArgusCarHire.IE) let you start the search "as a UK resident" (as an example), get quotes with all types of insurance included in price (almost always much cheaper than having all those types of coverage paid for at the counter) and then at the latest stage of checkout to change your residence country to US/Canada as appropriate.

Sometimes it doesn't work (after you change the country the system immediately recalculates the total... and usually to a much higher amount), but more often than not it works. This way you prepay a voucher, all types of insurance included with nothing to pay at the time of pick-up. I did this dozens of time with Alamo, Dollar and Budget with no issues, but as I mentioned in the very beginning of the post, YMMV! Some vouchers will have a footnote saying "Rates are not valid for US/Canada residents", so technically you might be denied a car at the counter with this voucher - but again, out of several dozen times I've never had such an experience (but one of my friends actually has been denied a car in PHL), so use this "trick" only when you can "afford" a chance of not getting a car when you come to the counter...

The rental car companies are required to have a minimal amount of coverage on the vehicle.

Million Mile Secrets

@Scuta @Zhou @purcitron - Usually the best option is to buy the liability insurance from the rental agency for convenience.

@john - The AMEX insurance is NOT liability insurance.

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