If you are on the look for a cheap auto insurance policy for a short period of time, there is a big likelihood that you don’t even need to buy it…
Is short term auto insurance required when you are renting out a car?
The rental service will offer you some combination of liability insurance, personal effects coverage, accident coverage, and/or a loss damage waiver (more commonly known as LDW). If you have your own car and have the respective auto insurance, you are most likely covered for each of these 4 insurances. As such, getting even one of them is likely a waste of money. You just have to make sure that you are using the car for recreational and not business use.
Below is a list of the 4 insurance types that the rental car service may offer you and why you probably don’t need them.
Liability coverage: The liability insurance on your own policy will protect you.
Loss Damage Waiver (LDW): Collision & comprehensive insurance (if you have them on your car), makes this coverage superfluous. Your collision insurance pays for damages to your auto regardless of who is at fault in an accident. Comprehensive insurance protects you from damage or loss caused by everything from the weather to burglary.
Personal accident coverage or accident insurance: This type of insurance from rental car companies is health related. If you already have Personal Injury Protection (PIP), health insurance, or Medical Payments coverage, this type of insurance is unnecessary.
Personal effects coverage: Rental car companies offer this type of coverage for stolen items. However, it is very likely that your homeowners or renters insurance already covers items that are stolen not just inside the house, but outside of it as well.
If you want to be 100% sure that your homeowners, renters, and/or car insurances carry over, call them or read the policies for yourself. If you pay for the rental using a credit card, the card company may automatically give you some coverage, so its worth calling them as well.
What if you’re borrowing somebody’s car?
If you have your own car and thus have the respective car insurance, you needn’t worry. Furthermore, the lenders policy (as long as they give you permission to drive the car) transfers over to you. But what if you’re borrowing somebody’s car and don’t have your own car insurance?
If you want to borrow somebody’s car and do not have you car insurance, the main thing, which can hurt you, is lack of liability coverage. Yes, the lenders liability protection will cover you when you borrow their car. But if their liability coverage is not enough, you are liable for any amount, which is not covered by the lenders liability insurance. You can easily prevent this from happening by purchasing a cheap nonowners policy. As always, if you are innocent in an accident, the other person will pay for the cost to repair the lenders vehicle (although this isn’t the case in some states).
If you borrow a car, who pays for damages done to the car itself? The collision and/or comprehensive coverage of the owner will pay if you are guilty, the other party will pay if they are guilty, and your coverage may pay if you have your own full coverage (comprehensive & collision).
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For a more complete look check out Short Term Auto Insurance or Temporary Car Insurance
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