Does Insurance Pay For Rental Cars?

You must have seen the movie Zindagi Na Milegi Dobara, right? Three friends go on a road trip to amazingly beautiful places scattered across Spain - by renting cars along the way. And, you must have seen a similar concept when you visit Goa - people renting cars to make travelling through the city way more convenient, fast, and cheap.

So, what are the conditions associated with such rented cars?

Let’s talk about what rental cars are first. As the name suggests, a rental car is a car that you rent for a specified period of time. It can usually be rented on an hourly, daily, weekly, or monthly basis.

Coming to the conditions - firstly you need some basic documentation like a valid driving license, ID proof, etc. The car provider gives you the documents related to the car. The rental rates vary across providers and there are additional conditions pertaining to fuel, car accessories, return timings, etc.

And, as we all know, once you’re on the road - you assume a certain level of risk. What happens if your rental car gets into an accident? Who pays for the loss or damage? Can you get an insurance policy to cover the same?

Let’s have a look!
 

Covering A Rental Car

When you rent a car, you are responsible for any damages and associated repair costs. These are usually covered by the security deposit you give to the car provider, but you can also purchase a rental car insurance policy for covering the same. The policy can be purchased as per the number of days you plan to use the car.

Most of the rental companies provide you insurance along with the car you rent.
 

I Already Own A Personal Car Comprehensive Policy. Will It Cover A Rental Car?

No. The comprehensive policy that you have purchased for your personal car will not cover any car that you have rented. So, it won’t cover accidental damages caused to the rental car or to a third party because of the rental car. Your personal policy will have the details of your vehicle and hence, it will cover only the damages caused to your personal car and not the rental car.

But, keep in mind that your Personal Accident Cover will cover any permanent disability caused to you, even if you are driving a rental car.

For example, Nisha went to Pondicherry on a solo trip for relaxing. She rented a car to make her local travel more comfortable and convenient. Unfortunately, she got into an accident which caused substantial damage to a shop and severe damage to her eardrums. This, in turn, caused a hearing loss in both her ears. Her Comprehensive Insurance Policy will not cover the damages to the shop, but her Personal Accident Cover will compensate her for the injuries.
 

What Does Rental Car Insurance Cover?

A rental car insurance policy functions differently as compared to a normal personal car insurance policy. It provides coverage in the following scenarios -

• Collision Damage Waiver
  It covers any damages that are caused to the body of the car. Any damages caused to the windshield, batteries, tyres, engine, or gearbox, and any interior damages will not be covered.

• Super Collision Damage Waiver
  The policy may also provide coverage to several additional parts of the car other than the body of the car.

• Theft
  It provides coverage if the car is stolen and any damages caused to the car in the theft attempt. This ensures that you won’t have to pay anything to the rental company out of your own pocket.

  For example, Rohan had rented a car to travel from Pune to Mumbai for a work meeting. While his rented car was parked outside the office, an unsuccessful attempt to steal it was made. This resulted in broken windows and handles. These damages will be covered by the rental insurance policy.

• Third-party Damages
  Any damage caused to a third-party or their property is covered.

  For example, Sam had rented a car to go on a trip with his family. The car spun out of his control and crashed into a tea stall. The tea stall owner will be compensated for the same by the rental car insurance policy.

• Personal Accident
  The policy will cover any accidental injuries caused to you or any co-passenger.

• Uninsured Motorist Protection
  If the driver of the other car isn’t covered under any insurance policy, rental car insurance will provide coverage in case of any accidental damages or injuries.

• Roadside Assistance
  ​​​​​​​The policy will provide assistance in the following situations-
  • Car breakdown
  • Fuel shortage
  • Tyre puncture

• Full Protection
  The policy offers ‘full protection’, i.e. coverage against all the covers that are mentioned above - theft, damage, roadside assistance, personal accident, etc.
   

Things to Check Before Buying Rental Insurance

Here’s a quick checklist of a few things you should look before you invest in a rental car insurance policy -

• Limit Of Collision Damage
  Make sure that you check the maximum limit of the collision damage. It generally depends on the value of the car you have rented and is subject to the decision of the rental company. This is an important facet as any damage that exceeds this limit will have to be paid for by you.

• Deductibles
  A deductible is a predetermined amount that you have to pay before the insurance company steps in to pay the claim. It is applicable to rental insurance too. Check the deductible amount before making the purchase so you are aware of the cost you will have to bear during claim settlement.

• Roadside Assistance
  Check if the insurance policy provides roadside assistance as an included feature or as an add-on, so you don’t face any surprises in an unexpected event.

• Complete Coverage
  Lastly, check if the entire car is covered by the policy. As discussed before, the collision damage waiver provides protection only to the car body - only the super collision damage waiver covers the entire car.

  For example, Amit and Ahmed rented two cars for a leisure trip. Ahmed confirmed that the rental car insurance policy for his car had a super collision damage waiver, whereas Amit was satisfied with just the collision damage waiver. They parked their cars outside a movie hall. A rogue truck driver accidentally crashed into both the cars, which damaged their entire bodywork, windshields, and tyres. While Ahmed’s policy will cover all these damages, Amit’s policy will cover only the bodywork.

  This brings us to the end of the article. We hope it helped you understand why an insurance policy is necessary even if it’s a rented car. Accidents don’t tell and happen. You should always ensure that you are financially protected, no matter the scenario.