For many travelers, there's a moment of dread when they get to the rental car counter and wonder how much insurance coverage they need. If you have State Farm auto insurance for your primary vehicle, it's reassuring to know that you're covered for rental cars with one caveat: You're only covered to the limits of your personal vehicle's auto policy.
What to Know About State Farm and Rental Cars
The State Farm website states that, for most people renting a car for personal use, buying insurance from the rental car company "is probably a waste of money." You're covered to the limits of your own policy. That means if you drive a brand new full-size car and rent a compact car, you're good to go. But if you drive an older, modest vehicle and rent a new model with many bells and whistles, it gets tricky.
The rental car company will offer a Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW), that may cost more than $20 per day in most states. This will waive repair costs if the car is damaged or stolen, and would reimburse costs for towing the vehicle, among other things. If you are unsure what your State Farm policy covers, always double check before picking up your rental car.
In the case of an accident in a rental car, you would pick up the deductible on your auto insurance policy and then State Farm would cover the remainder, up to your policy's limit. If your State Farm policy has a very high deductible, you might consider opting for more coverage from the rental car company.
Anything over your State Farm policy limit might be protected by your credit card but, again, it's best to check on your card's coverage specifically for rental cars. Always know before you go.
7 Reasons to Buy Car Rental Insurance
Even when you have a level of coverage, there are times when it's better to purchase additional rental car insurance anyway. These include:
You don't want to pay the deductible in the event of an accident. If the deductible on your auto insurance is high, it would apply to your rental car, too. It may give you peace of mind to just fork up for car rental insurance and know you won't pay end up on the hook for more than that amount.
You don't want to make a claim on your personal insurance. Maybe you recently had a claim and don't want your premium to explode. Two claims in one year can raise your insurance rates significantly, so you may want to err on the side of caution and buy insurance.
Your own coverage is spotty. If your State Farm auto policy isn't comprehensive, you might want to buy the CDW. If you have skimpy health insurance, you might want to pick up personal accident insurance. If you don't have liability coverage, you may want to buy that.
You're traveling for business. In that case, your personal auto insurance likely won't cover a rental car.
Your coverage limits are low. If you'll be driving in an unfamiliar area or bad weather and nervous about possible damage to the vehicle, you might consider either raising your coverage levels or picking up additional coverage from the rental car company or a third-party provider.
You're renting an expensive vehicle. Remember, your State Farm auto insurance will only cover up to the limit of your own vehicle's policy. You may want to beef up coverage for your fun rental weekend in a Corvette. Always be sure to check your coverage limits.
You're renting in another country. With State Farm, you're covered for rental cars in the US and Canada. If you're traveling outside these two countries, you'll need to purchase supplemental insurance. (Mexican rentals require extra insurance anyway.)