Insurance Matters: Do I Need to Buy Insurance When Renting a Car?

As an Independent Insurance Agent, our office gets asked a lot of insurance questions. One of the more frequent questions we get is: "Do I need to buy the insurance they offer me when I rent a car from a car rental company?"

The short answer is yes, but then again no.

Confused? Let me explain...

The typical insurance policy in Michigan that includes coverage for liability, comprehensive coverage, collision, etc. extends this coverage to any car you are you given permission to drive. So, if you drive a rental car in theory your policy coverage would extend to this rental car.

On the other hand, most personal auto policies in Michigan do not provide coverage for "loss of rental use." If you pay for a rental car but cannot drive it after getting in an accident, etc. the car rental company could charge you for the "loss of rental use" they would incur from not renting that car to someone else. So, this coverage you would want to buy from the car rental company. There could be other items like this that your personal auto policy would not cover. (Please see your policy for more details)

So, in summary, your personal auto policy should extend to cover you when driving that rented car, but be aware of the hidden fees or charges you could incur if you damage their car. Also keep in mind, any claim you incur while driving the rented car would show up under your auto policy.

As always, keep in mind all Michigan auto insurance policies will vary in their coverage just as the rental contracts for car rental companies. Please see those documents for more details.

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