We’ve all been there. You’re renting a car, everything is going smoothly, you’re about to drive away from the rental car lot, and then the pitch begins. We’re talking about that scary pitch that many rental car agencies use to convince you to purchase a whole bunch of insurance coverage for whatever vehicle you’ve rented.
Unfortunately, many people in this situation don’t know enough about California car rental insurance requirements to know what they should do in this situation. Many decide to simply purchase the maximum insurance coverage because they’re worried they’ll end up owing thousands of dollars if something happens to the rental car while they’re driving it. But is that the case?
California car rental insurance requirements are unique from many other states in the country, but that doesn’t mean you have to wonder exactly how they work. We at Freedom National want to help eliminate questions or confusion about California car rental insurance requirements so that you can make the right and responsible choice when renting your next vehicle.
Here’s everything you need to know about California car rental insurance requirements.
Here’s how it works. You do need to have certain insurance coverage to legally rent a car in California. That part is definitely true. And you can almost always purchase that coverage from the rental agency at the time you rent the car. However, some people will find that their existing insurance policy also applies to them when renting a vehicle. That said, this isn’t always the case. Before declining coverage from the rental agency, it’s important to check with your insurer about whether your existing policy meets California car rental insurance requirements by extending to rental cars.
In California, vehicle renters are required to hold some kind of third-party liability coverage in order to rent a car. This refers to insurance coverage that will pay for the medical costs or damages caused to people other than you, the driver, in an accident where you’re involved.
In order to rent a vehicle, you’ll need at least:
Most drivers will already have this as part of their existing auto policy, but you must make sure that you meet the minimums for renting a car, and that your insurer extends their policies to rented vehicles.
If not, you’ll need to purchase rental car third-party liability insurance from the agency, an insurance agent, or your insurer.
Even if you’re properly covered for third-party liability insurance in order to meet California car rental insurance requirements, there are still additional insurance options you might want to purchase from the rental agency to give yourself extra peace of mind and financial security. Here are some of the most common optional coverages you can purchase. Keep in mind that none are required, and you should decide for yourself which ones make sense for you, your trip, the area where you’ll be traveling and how you’ll be using the vehicle during that time.
Whereas third-party liability insurance covers damage or injury to other drivers and vehicles, a loss damage waiver covers damage to the rental car itself. If you were to experience an incident where your vehicle was damaged, either in an accident on the road or otherwise, you could be liable for the cost of damages without a loss damage waiver.
That said, these protections that are part of California car rental insurance requirements do not apply if you’re found to have been driving recklessly, committing a crime, or breaking other agreements like driving in Mexico.
If you’re worried about medical bills as the result of an accident and you don’t already have health insurance, personal accident insurance (PAI) may be worth considering. It will cover small medical bills of $2,500 or less resulting from any accident or incident that occurs while you’re using your rental car, as long as it’s being used within the bounds of the rental agency’s agreement that you sign upon rental.
Worried about getting a flat tire, running out of gas, or experiencing other minor issues while on the road? Signing up for your rental agency’s roadside assistance coverage can help. It will cover the cost to send a tow truck or other help when you get stuck on the side of the road with a vehicle issue.
This coverage will protect you against liability resulting from theft of your own personal property when using the rental car. That said, you should always try to travel without valuable items whenever possible, and to follow other best practices like parking in safe, well-lit areas and keeping valuables locked away safely whenever not in use.
Assuming you’re properly covered when renting your car, is there anything else you need to know? Yes!
There are some things that are excluded when it comes to California car rental insurance requirements. For example, if you buy liability insurance from your rental car agency, it will usually only cover up to $1 million. That means that if you were to be sued by a third party for $3 million, you would be personally liable for the remaining $2 million (unless your existing insurance helps cover the rest).
If you purchase a loss damage waiver, you should know that this also has lots of limitations. A loss damage waiver essentially means that the rental car agency can’t sue you for damage to the vehicle, but there are exceptions that include:
If damage to the car happens in relation to any of the above circumstances, your loss damage waiver will be totally invalid.
Understanding California car rental insurance requirements is all about doing a little bit of upfront research to save yourself a lot of frustration, cost, and stress down the road.
The key point to remember is that third party liability is required when renting any car in the state of California, but that doesn’t always mean you have to buy it from the rental car agency. Sometimes, it’s included as part of your existing insurance policy. The last thing we at Freedom National want is for our customers or any drivers to purchase insurance coverage they’re not required to have, or coverage they’re already covered by, incurring completely unnecessary costs.
Looking to access cheap car insurance in California? You can find it here at Freedom National, where we offer the best cheap car insurance California has to offer.