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Do I Need Michigan Car Rental Insurance Coverage on My Vehicle?

Car rental insurance can refer to a couple of different types of insurance in the state of Michigan and it applies to all US states. One is the car rental coverage which you purchase on your vehicle, and two is car rental insurance you place on a rental car. Both are completely different types of coverage and both can be a little confusing. Find out if you should purchase car rental insurance on your vehicle.

Rental Insurance for Your Car

Who should purchase rental coverage? Rental coverage on your vehicle can be very convenient if you are in a severe accident. You should purchase the coverage if one or more of the following situations apply to you.

  • You only have one vehicle
  • You have a small or non-existent emergency fund

While your vehicle is not drive-able or in the shop for repairs, a rental car will be partially or fully covered depending on the coverage you selected. Rental coverage is purchased by how much your carrier will payout per day up to 30 days. For example, 30/900, $30 a day up to $900. It can be frustrating being without a vehicle after an accident. That frustration can compound quickly especially when the the accident was not your fault.

Rental coverage for your vehicle is a convenience coverage. Lots of people can coordinate schedules or seek help from family to get access to a loaner car while theirs is not drive-able, but it is inconvenient. Having car rental coverage on your vehicle will make your claim simple and certainly more tolerable.

Avoid car rental coverage if one or more of the following apply.

  • You have quick and easy access to an extra vehicle
  • You have an emergency fund available to cover the costs of a rental

I have seen it time and again where a couple owns and insures three vehicles, yet they carry car rental on all three. Last time I checked, you can only drive one vehicle at a time. Rental coverage on three vehicles for a two driver family is a total waste of money. Please use common sense when purchasing this coverage.

Common Misconceptions

Car rental coverage is only for when your vehicle has sustained a covered loss. It does not provide coverage if your car has maintenance problems and or mechanical failure. Yes, it would be nice, but it just doesn’t work like that. Car rental is only available if you have purchased both comprehensive and collision coverage.

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4 comments

  1. You always need insurance when renting a car.

  2. I’ve also been wondering whether it would be best to have car rental insurance. I’m going on vacation this weekend, so I’ll need to rent a car to use to drive around to all of the tourist destinations that I want to go to while I’m out of state. It seems like a good idea to have rental insurance if I only have one car, or if I don’t have much of an emergency fund. Both of those scenarios applies to my situation, so perhaps I should get car rental insurance just in case something happens while I’m out of state.

    • For you I would recommend purchasing coverage for your rental through the rental company. It is the only way to be 100% protected from out of pocket expenses.

      Your personal car insurance policy does extend physical damage coverage to a rental car automatically so long as your personal vehicle has both comprehensive and collision coverage selected. However, the deductible will apply and the rental company will most likely charge you rent for the days the rental car in being repaired.

      Car rental coverage on your personal policy only covers the cost of renting a car while your vehicle is being repaired.

      It definitely can be confusing. Buying the insurance through the rental company may seem expensive, but it is a bit of a gamble if you opt out. If you really want to enjoy your vacation without constantly stressing about potential damage, buy the coverage at the rental counter.

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