Can I Rent a Car without Auto Insurance?
You’re excited you finally got out of town for a fun weekend away. Yay! You want to tool around and see the sights, so you made a car rental reservation at the airport location. Yay? You don’t have a car, so naturally, you don’t have auto insurance. Definitely not yay. Now you’re wondering if you can skip the high-pressure insurance offers at the rental counter to save a few bucks.
In short: Depending on your state, rental cars either come with no insurance at all or the state minimum auto liability insurance. Damage to the rental car or your own property, as well as medical and vehicle repair bills for the other person beyond any minimal liability provided, won’t be covered. If you don’t have your own auto insurance, you can purchase additional coverage through the car rental company, get certain coverages through your credit card, or purchase a non-owned auto insurance policy.
Rental Cars and Auto Insurance
The short answer to your question is sure, you could drive off without purchasing auto insurance but it’s not a smart choice - here’s why. Car rental companies are not required to provide any insurance at all in many states. Even in the states where they have to include the state minimum third-party liability coverage, the limits are often quite low, in the $10,000-$15,000 range. Medical costs can quickly add up to more than that if the injured person needs an ambulance ride to the emergency room and emergency care.
Also, any liability insurance that’s included doesn’t cover damage to your rental car or your property. Even minor fender benders can cause a surprisingly large dollar amount of damage, especially if you sprung for the premium upgrade on your rental car. And what about your tablet, cell phone, and new clothes you bought for the weekend? Those wouldn’t be covered either.
So, before the nice person at the rental counter hands over the keys to your mid-size sedan, it’s a really, really good idea to make sure you have enough insurance.
Since you don't have an auto policy of your own, you have two options.
First, you can purchase auto insurance from the rental company. Before you do that, learn what the coverages are for, and find out how much each coverage costs.
Second, you can rely on auto insurance provided through a premium credit card, but make sure you understand what’s included and what’s not. Damage to your rental car is often included, so this can be a great way to save some money on the rental car company’s Collision Damage Waiver (CDW) insurance.
However, you’ll want to read the teeny tiny print in your cardholder agreement first, because most credit cards do not include liability coverage. If third-party liability isn’t included, you will definitely want to purchase the supplemental liability (LIS) coverage from the rental car company. Yep.
Plus, make sure you book the car on the credit card to get the coverage and watch out for those gotcha moments!
The Secret of Non-Owned Auto Insurance
The best advice for those who don't own vehicles but need the benefits of an auto insurance policy is to look at Named Non-Owner Auto coverage. Non-owned auto insurance is insurance that covers you for third-party liability when you are driving a car that you don’t own, including if you borrow a car through a sharing service such as Zipcar, Turo, or Getaround.
You may also be able to get a policy with medical payments and uninsured/ underinsured motorist bodily injury coverage as part of a non-owner car insurance policy. However, non-owned auto insurance still won’t cover damage to the rental car, or loss of use for the rental car agency. Those coverages still need to be purchased at the rental car counter or picked up by your premium credit card if it’s an included benefit.
The Courage to Say No, I Don't Need That
Purchasing full auto insurance from the car rental company each time you rent a car can cost you more than $30 a day. Surround’s new subscription model Starter Pack includes non-owned auto insurance, in addition to apartment renter’s and professional liability insurance, for just $50 a month. With Surround’s Starter Pack, you’ll have the insurance coverage you need every time you step up the rental counter without draining your bank account. So, the next time that you need a car rental for your weekend getaway, you’ll be covered.