People often call often and ask if they have coverage if they rent a car. If you have full coverage on your car, the answer is YES. Your auto policy will cover a rental car the same way it covers your own car. If you have liability only, the answer is NO.
I have a unique experience with this subject as well, as I worked for Enterprise Rent a Car in a previous life for three years (Side note, they don’t “deliver” they will “pick you up”).
If you have full coverage when you rent, you can decline what the rental car company offers (called a Collision Damage Waiver). The only rub is, if you are in an accident with the rental car, you have to file a claim against your policy, pay your deductible, possibly get an increase in your rates, and PAY FOR THE DOWNTIME of the rental. What that last part means, is the rental car company will charge you the daily rental rate while it is in the shop getting fixed because they cannot rent it.
If you elect to take the rental car coverage, if covers the car up to a total loss. So you could drive the car into the ocean and walk away (this is something a rental car employee once told me). Or another one once told me, “you could hit a bus full of nuns and walk away”.
The collision damage waiver comes with a daily charge, usually $10-$15 per day. If you rent a car for a day or two and are driving somewhere you are unfamiliar, or in a busy city notorious for crazy drivers like Boston, or Washington DC, I would suggest you consider taking the coverage. If you are on vacation for two weeks, it makes sense to just use your own policy.
If you have liability only, you can call your insurance company and put full coverage on while you are renting the car, and then remove it when you come home. It might cost you $10-$20 per MONTH to put that coverage on so if you are renting a car for three days, you may only pay $2-$3 to have full coverage for that period of time. Not bad.
Farmers offers a coverage called “Loss of Use”. This will pay for a rental car if you are in an at fault accident. It pays $50 per day for up to $1000. If you are in an at fault accident, in a rental car, this will cover the downtime of the vehicle because it will pay YOU in the form of a check. If the car you wrecked is in the shop for 5 days, your Farmers policy will pay you $250 which you can use to cover the downtime of the vehicle.
That may be more than you wanted to know about how your policy covers a rental car, but as GI Joe says, “Knowing is half the battle”.