Demystifying car rental insurance

(Presented by Travel Guard exclusively for Expedia customers)

[3-minute read]

So you’re at the car rental pick-up, raring to sit at the wheel and dash to your next destination. While you await your keys, the helpful attendant at the counter has other plans. The inevitable question pops up: ma'am, do you need insurance?

You’re sure you added Travel Guard’s collision damage insurance while booking your rental with Expedia. You tell her as much. But she has more questions; ones with legal-ey terms that you don’t fully understand: liability, supplemental liability, overseas coverage, and so on. Puzzled, you no longer know whether you have the necessary coverage to drive your rental car.

Sounds familiar? Let’s help you clear this confusion.

Collision damage protection

When offered at the counter: Decline if you’ve purchased insurance

First things first. If you said Yes to Travel Guard’s collision damage protection while booking your car rental with Expedia, you already have collision damage protection. This protection is offered by TravelGuard and it covers you in all US states — when you drive interstate, and even when you drive overseas.

Here’s a quick link to share with the rental agency while picking up your car: Collision Damage Plan. Bookmark it. Even better, download the policy document for your state of residence and keep it handy on your phone or another device.

Keep your key insurance documents handy to make that conversation at the car rental agency easier. Gathering this information is a one-time activity that’ll serve you well whenever you travel or rent a car.

Liability insurance

When offered at the counter: Decline if sufficiently covered

Many states in the US require you to have a minimum level of liability insurance in order to lawfully drive a car. This minimum coverage varies by state and by the damages caused to others in an accident for which you have legal responsibility.

Do you already have liability coverage?

The Travel Guard Collision Damage Protection plan you bought through Expedia doesn’t include liability protection. However, you might already have liability coverage through other sources:

Included in rental price:The car rental agency might be required by law to provide a minimum level of liability insurance.
In the European Union in particular, such minimum liability coverage required by law may be significant. Ask if the price you’re paying for the rental already includes that minimum liability insurance.
Included in your existing personal auto insurance: Any personal auto insurance you have might give you liability coverage even when you’re driving a rental car.
Call your auto insurance provider in advance and check the extent of such coverage. For instance, liability protection bundled with your auto insurance may have a dollar limit to the amount you can claim. Also ask if that protection is primary or secondary.
If your auto insurance offers such coverage, keep a copy of your policy document handy.
As an add-on to your existing homeowner’s/tenant’s insurance
If you don’t have the minimum level of liability coverage mandated by the state, or if you’re apprehensive that this minimum level of coverage is too low; you can add an umbrella liability insurance rider to your auto or homeowner’s/tenant’s policy before starting on the trip. Just speak to the provider of these policies about adding such a rider. In the process, you may end up with sufficient liability coverage that’s way cheaper than the insurance you’re offered at the counter.

Personal accident insurance

When offered at the counter: Not mandatory; you may decline if covered

Your health, life, or auto insurance may already offer a degree of personal accident coverage. Also, neither personal accident insurance nor personal effects insurance is legally required to drive a car.

If your existing insurance already provides personal accident coverage, you can say No to it at the counter.

Disclaimer: This article is not intended to be legal advice or an insurance recommendation for automobile insurance. You should consult your attorney for any questions.

Additional reading:

Ace the conversation at the counter

Equipped with all that we know now, let's imagine what a sample conversation with your car rental agency attendant might go like:

Good morning! I’ve booked my car rental through Expedia. I’m here to pick up my vehicle.
Sure! I’ll need to see your ID.
[…after ID verification and vehicle inspection]

Ma'am, wondering if you need insurance for your car rental. We have some excellent plans.
No, thanks. I bought my insurance while booking the car.
Ma'am, that insurance may not cover you in this state.
I know for sure it does. Here’s my policy document. See!
Ma'am, you’ll still need liability insurance. You can’t drive lawfully without it.
Is the level of liability protection required by the state included in the rental price?
Umm... yes, it is. But that coverage is too low. You’ll still need supplemental liability insurance.
I don’t think so. My personal auto insurance gives me additional liability coverage. I also have umbrella liability coverage linked to my homeowner’s insurance.
That sounds great! What about personal accident insurance?
I read up my health insurance policy. It gives me sufficient accidental cover.
You’ve obviously read a lot! Enjoy your set of wheels!
Thank you! Could I now have my keys?
Here you go, ma'am…

Jargon:unjargon

Car rental insurance comprises several kinds of coverage. Here are the terms you should know:

Collision damage protection

covers primary physical damage to your rental car in the event of a covered accident or collision. This insurance may also protect you from financial loss in case the rental car is stolen or vandalized.

Liability insurance

covers damages to other people's person and property in accidents for which you’re legally responsible. This insurance may also cover medical expenses for other people’s injuries, legal fees if the accident results in a lawsuit against you, and related expenses. Liability insurance is also sometimes known as casualty insurance or third-party insurance.

If you don’t have liability insurance, you may be responsible for paying for damages in such accidents from your own pocket. But, most likely, you’ll have liability coverage through your existing insurance or another source.

Supplemental liability coverage

adds to any liability insurance you might already have. Many supplemental liability plans increase your liability coverage.

Personal accident insurance

provides coverage for any injuries or disabilities that you may sustain in an accident.

While at the car rental counter, you may also hear about primary and secondary coverage. Primary coverage is insurance that pays first and to the extent allowed in its policy document. Secondary coverage comes into play only for expenses that are not settled by primary insurance.

Personal effects protection

covers you against theft of personal items from the rental car.

Deductible or excess

in insurance lingo, is the amount that you must pay from your own pocket before your insurer will pay for any damages. Insurance policies with higher deductibles generally have lower premiums.

Get support

Still have questions? Call Travel Guard:

1-855-334-3855