When you rent a car, you still have car insurance needs. Learn about the type of coverage needed on your rental and how to determine if you need to purchase more. There are possible limitations of your personal auto coverage with rentals. It's important to understand rental car insurance basics. That will help you make the best decision for your vacation, business trip or replacement car rental. 

Is Rental Car Insurance Mandatory? 

Yes, to rent a car, you must show proof of insurance coverage. Otherwise, you won't make it past the checkout counter. The amount of coverage needed depends on the state in which you rent the car. Additionally, the rental company might have minimum insurance requirements.

What Are Your Options for Rental Auto Insurance? 

First, check your personal auto insurance policy. Your agent can help you determine if your coverage applies to rented vehicles. If not, you may be able to add it for a nominal fee. 

If you rent a car that is worth a lot more than your own vehicle, you may need to buy extra rental car coverage. That means buying higher limits from the leasing company or your own insurer. Basically, you want to have enough coverage for possible damage to the vehicle.

As a condition of the rental contract, you may have to give permission to the leasing company to receive any payouts for damage to the rental car.

Know the Applicable State Requirements 

Chances are that the rental company is going to check your insurance. Still, they might or might not look at the coverage limits themselves. Therefore, it's up to you to also check the coverage to make sure it still suffices for the rental. Keep in mind, if you turn down additional coverage, you might be liable for damage that exceeds your auto insurance limits.

Main Types of Mandatory Coverage 

Most states require bodily injury and property liability insurance. Bodily injury insurance covers you for medical expenses of third parties, not including your own or your passengers. Property damage liability pays for damage to the property of others. Some states mandate uninsured/underinsured motorist coverage or personal injury protection on the car you drive. If you are not sure what coverage you need, ask the rental company. Then, speak to your car insurer.

The leasing company might want you to have collision and comprehension car insurance as well. Collision handles damage to the leased vehicle caused in a wreck with another car. Comprehensive coverage covers other events that damage your car. It might pay for damage from falling objects and natural disasters.