A very common question our agency gets is, “Am I covered if I am driving a rental car?”. Here’s a great article by Amanda Prischak published by Erie that explains how your personal auto coverage will transfer to a rental vehicle:
Q: Does my ERIE auto policy provide coverage for rental cars?
A: In most cases, yes. “ERIE’s coverage is designed to suitably protect you and your family for incidental use of a car that is not your own, such as a short-term rental,” explains Dave Freeman, vice president and manager of Personal Lines Underwriting at ERIE. Just keep in mind that coverage only extends to cars in the U.S. or Canada.
That said, it pays to touch base with your ERIE Agent beforehand since auto policies vary from person to person.
It also pays to be aware of these things before you sign the dotted line:
- Some car rental companies charge for loss-of-use. This charge is meant to cover the costs of not being able to rent out the car if it’s being repaired after you damage it. Loss-of-use is not typically covered by an ERIE policy, so definitely ask your rental car company if they charge for loss-of-use and if they offer additional insurance to cover it.
- Rental companies also often charge for diminished value and other administrative fees. This means that should you damage a rental car, the rental company may insist that the repaired vehicle is less valuable because it was wrecked. They’ll then charge you diminished value fees as well as other administrative fees, such as a fee to open claim, which ERIE does not charge. To find out if this applies to you, make sure to carefully read over the rental agreement obligations.
- Consider who else besides you would be driving the car. Your policy extends coverage to any family members* who are residents of your house and anyone else specifically listed on your policy. In this case, coverage from the rental company might come in handy if anyone else will be behind the wheel.
- Read the fine print before you sign the dotted line. “While the Collision Damage Waiver purchased through the rental company may cover potential loss of use, diminished value and administrative fees, the optional coverage purchased from a rental company can also be extremely restrictive,” says Freeman. “It might limit who can drive the car, where it can be driven and for what purposes. If you have an accident and are found to have been outside any of these restrictions, you can probably kiss your optional coverage goodbye.”
- Consider your credit card. Many credit cards also offer rental car insurance at no extra charge if you charge the rental fee to their card. Just know that this coverage typically only covers physical damage to the rental car, so you’ll still need separate liability coverage. Still, the credit card can can add valuable coverage on top of your personal auto policy and cover your deductible if you do have an accident. To get all the details, give your credit card company a ring.
All of the above also typically applies to any moving van you rent so long as the van has no more than six wheels and you rent it for personal (i.e. nonbusiness-related) reasons.
As a final precaution, give your rental car a good look before you drive off. Note any existing damage on it so you don’t get blamed for anything later on.
*Your family is defined as someone who lives in your residence and is related to you by blood, adoption or marriage. It also includes anyone in your care who is under 21 or any unmarried children who live away from home while attending school full time. Anyone else in your house—such as a live-in partner to whom you’re not married—would have to be named on your policy in order for coverage to apply in this situation.