Do I Have to Buy Rental Car Insurance?

Do I Have To Buy Rental Car Insurance?

As cities start to open after more than a year of pandemic lockdowns, tourists and travelers alike are starting to flock to the roadways with a lot of them using car rentals. If you use car rentals in Louisiana, it is essential to understand the insurance coverage requirements and protections outlined in the Louisiana Revised Statutes Title 22:1296.

Under this Louisiana law, car insurance policies are required to cover rental car services availed of by the insured if the insured has at least comprehensive and collision or liability insurance coverage. Given this law, Louisiana does not mandate a renter to purchase a separate auto insurance coverage for their rental vehicles if they have an active insurance policy coverage as outlined above for their private vehicles.

Is It Required That I Obtain Car Rental Insurance When Renting A Car In Louisiana?

It depends.

Under Louisiana law, it is not mandatory to obtain or possess car rental insurance to rent a car in Louisiana if the renter has an existing coverage for their vehicle or can present another source of comprehensive and collision or liability insurance coverage. Obtaining insurance from the car rental company is not required since your primary vehicle’s insurance policy typically transfers to your rental car as long as your car’s insurance is valid.

However, if the renter does not have any insurance coverage or source of comprehensive and collision or liability insurance coverage, the renter would be required to purchase car coverage insurance from the car rental company. The rental car company is also required to verify the renter’s insurance and can be held liable if it fails to do so.

Most major credit card companies provide complimentary comprehensive and collision or liability insurance coverage for rental cars if they used their card for the car rental transaction. Check with your credit card company if they have an applicable complimentary program for car rental insurance coverage.

How Much Does A Car Rental Insurance Policy Cover?

Typically, the car rental company’s insurance policy covers up to a one million dollar limit. However, the exact coverage can vary between providers, and it is crucial to understand the insurance policy of the car rental provider.

Is It Good To Purchase Additional Car Insurance Coverage If I Already Have Insurance?

It depends.

There is a saying that “over insured is better than underinsured.” Although it rings some truth in certain situations, sometimes it is simply unnecessary. In order to determine whether additional car insurance coverage is worthwhile, it is essential to see if there is any overlap between the insurance coverage offered by the car rental company to your existing coverage.

Some car rental insurance companies have other a la carte insurance that may cover certain circumstances that are not covered by your insurance policy. Some of these optional coverages include:

Loss Damage Waiver (LDW)

is technically not a coverage product. Instead, it acts as a waiver to relieve the renter of financial liability if their rental vehicle has been damaged or stolen. However, note that this waiver is voided if the accident is caused by the renter’s reckless driving or driving while intoxicated.

Supplemental Liability Insurance

is required by law for the car rental companies to provide state-mandated minimum liability insurance. However, the dollar amount covered and protection provided is minimal, so it is generally inadequate in the event of a severe crash.

Personal Accident Insurance

generally covers the driver and the passengers for any medical bills to attend to the injuries caused by the accident.

Personal Effects Coverage

protects individual items, including electronics and other personal things, stolen from the rental car.

However, some of these incidents may be covered by other insurance you may already have, including but not limited to auto, medical, travel, credit card programs, or other applicable insurance policies.

Which Insurance Policy Coverage Applies If I Am At-Fault In An Accident While Driving A Rental Car?

In the unfortunate event that you got into the accident and are at-fault while driving a rental car, the coverage available to you will depend on the insurance policy coverage you have available to you.

If you used your own insurance policy coverage for your private vehicle to apply on your car rental, then that insurance policy will be the primary insurance. This means that your own insurance policy coverage will be responsible for the accident you caused while driving your car rental. However, if you purchased insurance coverage through the car rental company it will serve as the primary insurance, even if this insurance is bought on top of your existing insurance coverage for your own private vehicle. Your personal insurance policy would be secondary in the event that the damages caused are in excess of the policy purchased from the rental car company.

If you have been involved in a car accident in Louisiana, whether as a rental car driver, or against a rental car driver, you should speak with us. Our experienced personal injury attorneys have extensive knowledge in representing the interest of our clients in traffic accidents. Please feel free to give us a call at (225) 963-9638, or you can click here to contact us and schedule a free consultation.