Mike: Every time I rent a car, I say ‘no’ to the insurance offer from the rental car agency.  Is that a good idea? – Brad.

Brad, This is one of the most common questions I hear from my clients. Like you, I personally waive the offer of coverage from rental car companies. However, there are a few things you should be aware of before saying no to the rental car company.

With a few exceptions, your auto insurance extends to non-owned vehicles.  A rental car would normally fall into this category. Where coverage is likely not to extend to a rented vehicle would be if you’re renting commercial type vehicles (U-Haul box trucks or vehicles over a certain GVW), motorcycles or you’re renting a vehicle in the name of a business or for business purposes.  Another potential gap is that there are usually limitations on extension of coverage if you have a non owned auto for more than 30 days.

Assuming the rental car is a normal private passenger vehicle that you are renting for personal use, the best coverage you have on any car on your existing policy, is the coverage that extends to non-owned vehicles.  If you have three cars and two of them only carry liability and one has $100 deductibles, the car with $100 deductibles would extend to rental cars. If you have a bunch of older vehicles with liability only coverage, liability is what would extend to a rental car, no comprehensive or collision!

There are a couple of charges that a rental car agency  may try and charge you, that your car insurance wouldn’t cover.  These would be diminished value and the rental rate of the vehicle for each day it was off the road getting repairs.  These rules only apply to private passenger vehicles.

All policies and state laws vary. Be sure to check your specific policy language or talk to a professional about your specific situation to determine the likelihood of coverage.