Rental Insurance Basics

As a general law, when you rent a car after yours has been deemed inoperable following an accident, you are required only to take out liability insurance- bodily injury and physical damage coverage. This normally costs about $10/day, but if you opt for full coverage, you would pay about $25 extra per day, though prices vary depending on your state. In many cases, though, the insurance company that covers your car will provide liability insurance for your rental.

Car rental companies also offer the optional choices of comprehensive coverage and collision coverage, which will cover any damage to the car that you are held responsible for. Your insurance company normally will not offer you this type of coverage for a rental, especially if the value of the rental is more than the value of your own car, which they will have to pay more for if the rental is damaged.

Collision coverage with a rental insurance company not only covers the cost of damages to the car, but a time of "loss of use," while the car cannot be rented by anyone else, and during which you can be charged a fee if you don't have collision coverage with the company.  Rental insurance is not something to be taken lightly, and is a necessity whether you are on vacation or doing business.