Whether you drive an SUV or a sedan, a Ford or a Porsche, no matter which type of car you go, there is something that will always be the same; car insurance policy. Auto insurance is essential for almost every state in the US.
But with millions of car insurance policies and hundreds of options, understanding everything about auto insurance can be daunting. Choosing your car insurance can lead to overspending and ending up underinsured. No one wants that.
One such confusion can be between rental car insurance and personal car insurance. Both of these are very common, very popular, and very similar. So what makes them different, and which one should you choose? Here’s everything you need to know about the difference between these two car insurance policies.
Personal Car Insurance
Personal car insurance can be called just car insurance. There is no single car insurance that covers it all. Car insurance covers your car for personal use, and not business use. But what comes under private car insurance?
Depending on your state, there might be one, two, or three mandatory car insurance policies you’ll have to get to drive a car legally. For example, 49 states out of 50 require drivers to have liability insurance to legally drive a car.
Liability Insurance
Liability insurance covers the cost of medical treatments and car repairs for the other driver in an accident that is your fault. It is also one of the most expensive car insurance policies you can get. Forty-nine states in the US require drivers to have this policy.
Personal Injury Protection Plan
There are 12 states in the US called the “no-fault states” that require drivers to have personal injury protection plans and liability insurance. These states include Florida, Hawaii, Kentucky, Utah, New York, etc.
A personal injury protection plan is used to cover the cost of medical treatments needed by the driver after a car accident. You can claim it irrespective of whose fault the accident was (that’s why these states are called “no-fault states”
Uninsured Motorist Coverage
Fourteen states in the US have made it mandatory for drivers to have uninsured motorist coverage. There are over 32 million uninsured drivers in the country, and the odds of you getting in an accident with one such driver are not that low.
In case you get in an accident with an uninsured or underinsured driver, you can claim your uninsured motorist coverage. If you live in a state where this policy, along with the other two mentioned above, is mandatory, then your personal insurance would include all three approaches.
Optional Policies
Apart from the mandatory policies, drivers also have some optional policies from which they can choose. These policies offer extra coverage and are recommended for people with expensive or new cars. Optional procedures include collision and comprehensive insurance.
Collision Insurance
Collision insurance is used when you drive your car into someone else’s car or any other objects such as walls, trees, light poles, etc. Any damage to your vehicle that may happen due to an accident (and it was not intentional) will be covered by collision insurance.
Collision insurance will pay for the cost of repairs needed by your car. This insurance comes with a coverage limit (as with every other car insurance). So the amount paid by your insurance company will be under the coverage limit.
Comprehensive Insurance
Just like collision insurance covers the damages your car may sustain while moving, comprehensive insurance covers the damages your vehicle may sustain while it is parked. Comprehensive insurance pays for the repairs needed due to projectile damage and damages due to natural disasters like earthquakes, fires, floods, etc.
Comprehensive insurance is also top-rated, as it provides coverage against theft. So in case your car is stolen, you can claim this policy to get the actual cash value of the vehicle. Fundamental insurance policy if you keep your car out in the open for long periods.
Live in a state where all three policies are mandatory, and you are planning to get the two optional policies as well. Your car expenditure can get extremely high, especially if you consider the money spent on gas.
It is essential to get your car insurance at the lowest rates possible. Make sure you search for policies, find different options, and compare all of them to get the best policy at the lowest price.
Keep your searches specific to the state. For example, if you live in Nevada, you need to search for the best Nevada car insurance companies and compare all of them. The more your research, the better prices, and policies you get.
Rental Car Insurance
Let us make something obvious. You do not need to have rental car insurance if you already have sufficient personal car insurance. What do we mean by adequate car insurance? Let’s say that you live in a state where two policies are mandatory, and you have both, along with comprehensive and collision insurance.
Since you are insured, your car insurance policies will also cover rental cars.
But there’s a catch. If you do not have optional coverages like collision and comprehensive, rental car companies might ask you to buy it directly from them on a per-day basis.
Since these companies need these car insurance policies to ensure their cars are safe, it is mandatory to have collision and comprehensive policies along with the other approaches. You can get rental car insurance, but it is always better to have your own car insurance policies covering the rental car.
Rental car companies might have some other requirements as well regarding the policies. Before you get any rental car, make sure you talk about every insurance detail so that there is no confusion.
And that was all about the difference between personal car insurance and rental car insurance. You do not need rental car insurance if you have sufficient private car insurance. But in case you do not have a car, non-owners car insurance would also work fine.
