Non-Owned Auto Liability Insurance

We all know that if we drive our own car, we need an auto insurance policy, but, what happens when we are driving a rental car, do we really need to buy a new auto insurance policy for the rental car?

Well, it can be yes and it can be no. Theoretically, it is necessary to have auto insurance coverage whenever you drive a car, so, if you drive your own car, you need to have an auto insurance policy that covered it.

But, when it comes to renting car, it will depend on whether it is used for business or pleasure purpose and your own car insurance policy may or may not be enough to cover for the rental car. If your comprehensive and collision insurance deductibles apply to a rental car, then you will be covered on your personal auto insurance policy. So, if it is enough to cover, then, you will not required to buy rental car insurance when you rent a car. Double confirm with your auto insurance company on this matter if you are not sure.

If your car insurance is not enough to cover the rental car, then, you have no option left: you would need to purchase an auto insurance policy to cover the car rental.

Currently, there are two different types of rental car insurance available: rental car counter insurance and non-owned auto liability insurance. The difference between the two are rental car insurance needs to be purchase everytimes you rent a car whereas a non-owned auto liability insurance will be a yearly policy, meaning, you buy it for one whole year. So, you need to consider if you are renting car frequently, if yes, then it will be much cheaper to purchase a non-owned auto liability insurance; if no, then buying rental car insurance whenever you rent a car would be a better choice.

The coverage provides by a non-owned auto insurance policy covered you when there is damage to someone’ else car, passengers or to people walking in the street who have been injured as a result of the accident. The other benefits from this policy is under-insured and uninsured coverage and medical expenses occurring to you or the car passengers.

However, you need to take note that non-owned auto liability insurance does not provide collision coverage. Collision coverage is what you use to pay for damages occurring to your car in the event of an accident with another car, object or if the car rolls over in such an event.

So, it is necessary to purchase a collision coverage from the rental company if you rent a car. A good new is that if you are using credit card to pay for your car rental cost, then you might want to take advantage of the free collision coverage provided by credit card company. Most of the credit card company provide the collision coverage free of charge if you charge the rental cost to the card, so, you might want to check with your credit card company to see if they provides this coverage.