If you are on the look for an auto insurance policy for a short period of time, there is a big likelihood that you don’t even need to buy it…
Is temporary car insurance necessary if you are getting a rental car?
The rental car service will offer you either a loss damage waiver (LDW), personal effects insurance, liability coverage, or accident insurance. If you already have you own car insurance, you likely don’t need any of these additional insurances. Just make sure to use the rental car for recreational use and not business use.
Below are the 4 aforementioned insurance options, which the rental service may offer you, and why they are likely not needed…
Liability coverage: The liability insurance that you already have pays for any damages, which you are found to be liable for.
Loss Damage Waiver or LDW: If you have both collision & comprehensive insurance, you don’t need a loss damage waiver. Your collision insurance covers damage done to your car even if you are found to be guilty in an accident. Comprehensive coverage covers damage done to your car from things such as wildlife and weather. Furthermore, some LDWs, which you can purchase, only cover damage done to the car if you are found to be innocent.
Personal accident insurance or accident coverage: If you already have either Personal Injury Protection, Medical Payments Coverage, or health insurance, you can skip on this additional insurance.
Personal effects coverage: This type of insurance protects from the loss of personal items or baggage. If you have homeowners or renters insurance, you likely do not need this insurance as both types of home insurance also cover belonging outside of your house.
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 already have your own auto insurance, you don’t have to worry. Also, the car insurance of the lender will transfer over to you. What if you want to borrow someones car and don’t have your own insurance?
Lack of liability coverage is the main thing, which can hurt you, if you are borrowing somebody’s car. If the lenders liability coverage is not enough (say it is $4,000 short of paying for the damages), you are responsible for the difference in an accident in which you are found to be guilty. You don’t have to worry about this happening if you get a nonowners policy, which provides liability coverage for those who borrow others cars. And, as always, if you are the innocent party in an accident, the guilty one will pay for the repairs (this isn’t the case in every state as some are no-fault states).
But whose going to pay for damages done to the car that was given to you? The owner of the car will pay if they have comprehensive and/or collision coverage. Or you may pay if you have these two coverages.
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