and you plan to rent a car, you may be surprised to learn that you have to have your own separate third-party liability insurance to do so. While rentals in most states include minimum liability coverage, that’s not the case in the Golden State. If you don’t have your own insurance policy, you’ll need to purchase one—but be sure to consider all of your options before buying coverage from your rental agency.
. However, that’s not the case in California. In the Sunshine State, drivers must carry their own third-party liability coverage. This pays for damages and medical costs incurred by someone other than you, if you cause an accident.
California requires all drivers to carry liability coverage in a 15/30/5 configuration, which includes:
In many cases, your current car insurance policy will include the protections you need to meet California’s requirements, but if you live in another state and you’re traveling to California, that might not be the case.
If your current coverage doesn’t meet California’s minimums, you’ll need to purchase additional coverage. Let’s see how you can do it.
Third party liability coverage is the only type of coverage required by California law, but that doesn’t mean it’s the only coverage available. Plus, while you can purchase coverage from your rental car company, that’s not your only option—and it’s not usually your cheapest one either.
and/or talk with your agent. Typically, your policy will provide the state-required minimums for any state that you visit. If you live in another state and you’ll be traveling to California, contact your insurance agent to confirm whether you’ll need to make any changes for your trip.
Even drivers with full-coverage insurance may still want or need added protection. Maybe your personal car insurance policy has a high deductible, or it doesn’t
Many credit cards provide free coverage to cardmembers for collision damage and theft when they use their card to rent a vehicle. Granted, this won’t cover the third party liability that’s required in California, but it will often take care of many of the expenses that would otherwise require you to purchase a collision damage waiver (CDW) from your rental agency. Most, but not all.
For example, most credit card companies that offer rental car coverage will pay for the cost of repairs to the rental car and loss-of-use charges to the agency. But this coverage is often capped, which means you could still be
over the limits of your coverage. Plus, you’ll likely still be required to pay administrative fees for making the claim, and you may be responsible for additional expenses, like towing charges.
And that brings us back to the rental agency’s options for additional insurance coverage.
Purchase car insurance coverage through the rental agency
Drivers who don’t currently carry car insurance can easily purchase third-party liability coverage directly from the rental agency in California. Unfortunately, this can get expensive fast. This is why it might make more financial sense to purchase a
policy from a regular insurance provider rather than paying the daily rate the agency charges.
But what if you’re just looking for a little added protection above what your policy and/or credit card can offer? In that case, it might make sense to purchase a loss-damage waiver (LDW) from the rental company. This puts the financial responsibility for damage to the rental back on the rental agency rather than on the renter.
In addition to an LDW, rental car companies will also likely offer a number of supplemental liability insurance coverages. These include:
Personal accident insurance (PAI), which can help cover medical bills if you’re injured while driving your rental car, and you don’t have health insurance.
Personal effects coverage (PEC), which can reimburse you for personal items stolen from your rental.
Roadside assistance, to help with things like breakdowns and flat tires.
Each of these coverages is purely optional, but they can provide added peace of mind. It’s also important to note that these coverage only apply to damages and losses that occur through responsible use of your rental vehicle. Be sure to read your rental agreement carefully to see what exclusions apply to any supplemental coverages you choose to purchase.
Do you need rental car insurance?
Do you need insurance to drive a rental car in California?—yes. Do you need to purchase rental car insurance from the car rental company?—no.
that will meet California’s requirements. And remember, third-party liability coverage is the only type of coverage that’s required under California law. That means there’s no need to feel pressured to pay the often far overpriced fees rental agencies charge for coverage.
To make sure you are ready with the coverage you need to rent a car in California, be sure to plan ahead and shop around before you head to the rental counter. Check your current policy carefully. If you don’t have a current policy, be sure to compare quotes from at least three providers before you purchase one.
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FAQs
Do you need insurance to rent a car in California?
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Yes. To rent a car in California, drivers are required to carry minimum liability coverage in the following amounts:
$15,000 of bodily injury liability per person
$30,000 of bodily injury liability per accident
$5,000 of property damage liability per accident
If you don’t currently have coverage, you can purchase it from your rental agency, or you can save money by shopping for non-owner insurance with a regular provider or increasing your own policy coverage to meet California’s minimums.
What is the deductible for car rental car insurance in California?
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Your deductible depends less on the state you’re renting a car in than on your personal auto insurance policy’s details. If you’re using your own insurance to cover the insurance requirements for renting a car in California, then your own deductibles will apply.
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