It's important to know what your health insurance and life insurance cover before you walk up to a rental car counter. The rental car company will try to sell you supplemental coverage, including collision insurance that protects the rental car itself and liability insurance in the event you cause damage to another person's property or injury to another person.
If you're in a car accident, neither of these policies cover accidental death benefits and emergency medical expenses for all passengers in the rental car. To fill this gap, rental car companies sell coverage with limited benefits through an insurance product called Personal Accident Insurance (PAI). But do you need it?
What is Personal Accident Insurance in a Rental Car?
Personal Accident Insurance (PAI) covers accidental death and emergency medical expense benefits to the renter and all passengers in the rental car. PAI is typically lumped together with another product called Personal Effects Coverage (PEC), which can bring the total additional cost to $5-11 per day, depending on where you are renting, plus taxes and fees.
If you rent from any of the major rental car companies, the PAI option will be fairly similar because the coverage itself is provided by third-party insurers:
- AvisBudget Group: Avis, Budget, Payless
- Enterprise Holdings: Alamo, Enterprise, National
- Hertz Global Holdings: Dollar, Hertz, Thrifty
It's important to know is that this insurance may duplicate coverage you already have through your health insurance and life insurance policies, and your personal policies are likely to be the primary coverage. This means that your own policies will typically pay out first, and when the policy limits have been reached, the PAI will kick in.
Typically, the medical coverage limit is usually around $3,500 and the ambulance benefit $150. Typically the death benefit is $175,000 for the renter and $17,500 for the passenger.
The Risk of Not Buying PAI When Renting a Car
What happens if you don't have health insurance or life insurance and you decline the PAI? In a nutshell, if there is an accident, you or your estate will be responsible for paying medical costs for everyone in your rental car.