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Should I Pay Extra for Rental Car Insurance in San Francisco

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Should I Pay Extra for Rental Car Insurance in San Francisco

We often find ourselves getting tired of being sold on paying extra for rental car insurance when we are standing at the rental car counter. But we also wonder do we really need it? It usually bumps up your car rental fees by anywhere around $15 to $60 in California. What if you don’t buy the insurance and get into an accident with a rental car in San Francisco? We will discuss the answers to these questions in this article.

California is one of the most visited states in America. Many people from other states visiting San Francisco or other cities opt for rental cars to travel around. The risk of being involved in an accident is always there. You should be confident that you and the people traveling with you are covered with insurance in case of a mishap. But you might not necessarily have to buy rental car insurance for that purpose. Most of the credit card companies and personal liability and personal car insurances cover rental car insurance. They might pay for the damages in case of an accident with a rental car.

Suppose you understand your coverage’s extent and affordability through credit cards, personal liability insurance, and rental car insurance. In that case, you can keep from paying extra money along with not being held responsible for the damages to the rental car in case of an accident.

Types of Rental Car Insurance in San Francisco

When you are renting a car, the representative of the car rental company would typically ask you if you want basic insurance coverage or full coverage. The problem with asking the question in such a manner when you are about to drive away is that it seems like there is no third option to the renter. The renter usually had not thought of getting into an accident before being asked that question. The idea, fresh in mind, prompts the renter to go for full coverage as basic coverage does not sound safe enough.

Full rental car insurance typically covers everything. From any damages the car receives, the time and cost that the company has to bear while the vehicle is getting repairs, injuries to you or other people riding in the car, their medical bills, and death benefits. It does not matter if the accident with a rental car was caused due to your fault or someone else. 

Basic coverage, on the other hand, is a Damage Waiver (DW). It means that the person renting the car will not be accountable for the damages the car receives in an accident. The renting company will be reimbursed for the costs and the lost profits it incurs due to the car’s maintenance.

If you decline the offer of additional insurance coverage, which you can as it is not mandatory for renting a car (if you already have third party liability insurance covered in your personal policy and you provide proof of that to the rental company. More of that is discussed below), you will be made to initial on the contract of the rental transaction under a clause that specifies your decision. 

If you are involved in a personal injury auto accident in San Francisco or Sacramento, California, contact a highly experienced and expert personal injury attorney who can get you an incredible amount of monetary compensation from the at-fault party along with ensuring specialized healthcare through their network of expert doctors to assist your recovery. 

Some people ask the representative dealing with them if their personal insurance would cover the same benefit. Most often than not, they do not get a clear answer as the renting representative does not know that themself. You should always ask the person dealing with you to present to you all the options.

  • Damage Waiver:

    Subject to the contract and agreement with the company, a loss damage waiver (LDW), collision damage waiver (CDW), or simply damage waiver (DW) waives off the responsibility of the renter of the car for any damage or loss to the car. The damage can result from or in the shape of a collision, diminishing of value,  administrative fees, loss of use, storage, towing, and theft. This type of additional insurance can cost up to $30. After doing some calculations, some rental car companies may still charge the renter up to a $500 deductible.
  • Limited Damage Waiver:

    Then, there is a partial damage waiver (PDW) or limited damage waiver (LLDW). As the names suggest, it only covers the amount of damage up to a certain extent (usually $1000) as agreed upon by the renter and the rental company. If the damages exceed the limit, the renter has to pay the additional amount to the company. Worse, some companies refuse to work with the renter’s insurance company and ask them to pay for the damages up front and get reimbursed by the insurer later.
  • Personal Accident Insurance:

    Personal Accident Insurance (PAI) is the full coverage mentioned above. It usually caps at $2500 to $3500 for all expenses, with an additional $150 for ambulance charges for each passenger. The death benefit for the renter and the passengers typically amount to $175,000 and $17,500, respectively. Some car renters have additional PAI policies, known as Personal Accident Insurance – Plus, that have increased benefits along with increased insurance costs.
  • Personal Effects Coverage:

    Usually offered along with other insurance types, personal effects coverage (PEC) is for any effects valued in terms of money that the renter or other passengers might experience, including theft of personal belongings. It also has a maximum cap value and is calculated for the duration of the rental. 
  • Supplemental Liability Protection:

    This type of insurance covers damage claims (up to $1,000,000) made by third parties for damages to their cars or personal injuries in case of an accident with a rental car. Supplemental liability protection (SLI) is also called additional liability insurance (ALI) or liability insurance supplement (LIS). Some rental companies offer SLP that covers personal injuries that you or your fellow passengers incur from an accident, with an uninsured driver, or in case of hit and run, but some don’t. So it is better to always confirm as the company would have separate insurance for that, usually called Underinsured or Uninsured Motorist Protection (UMP).  
  • Roadside Assistance Protection:

    You might not know, but many car rental companies charge you for getting locked out of the car, running out of gas, or losing the rental car keys. Roadside assistance protection (RAP) waives off from upon you any obligation to pay for such mistakes.


Another thing to be wary of while purchasing additional car insurance is to always check if coverage is ‘primary’ or ‘excess.’ Excess coverage starts after your own personal insurance coverage depletes or exhausts and not before that. On the other hand, primary coverage starts getting used from the first dollar spent on the coverage. 

Exceptions and Exclusions

Here are some exclusions and exceptions that you should know before purchasing additional rental car insurance in California:

  • If, at the time of the accident, the car was driven by a driver other than the renter, unless otherwise specified in the contract (usually by paying extra for each additional driver)
  • The driver of the car was under intoxication from drugs or alcohol
  • The car was being operated for a felony
  • The driver showed recklessness, or the vehicle was used for pushing or towing something
  • The car was used for driver training or commercially
  • The vehicle was a part of a contest of any sort or speed racing or was being driven in a dangerous or wanton manner
  • Intentional damage to the car, a third party or parties, a passenger, or to oneself
  • Personal injuries or death caused by self-infliction, engagement in illegal activity, an attempt to commit suicide, and attempting to commit a felony or assault while insane or sane.

Insurance Required by California Law

For private passenger vehicles, only one type of insurance is mandatory in California, third-party liability insurance. The minimum amount of coverage is also mentioned in the law. You do not have to go above and beyond that specific amount. However, many people choose to do so, and it is up to each individual. You not only have to have the third party insurance coverage for the minimum amount but are required to carry its proof as well. However, when renting a car, you do not necessarily have to purchase that insurance from the rental company by paying extra if your own auto car insurance or credit cards cover third-party liability up to the extent of the minimum amount.

The California DMV mandates all the drivers of all private passenger vehicles to have the following minimum third party liability insurance:

  • $5000 for product damage liability – damage to the property or belongings of the third parties.
  • $15000 for bodily injury liability – inflicting injury or death to a person.
  • $30,000 for inflicting death or injury to more than one person.

No insurance for injury caused to you or the rental car is mandatory to rent a car in San Francisco, California. 

Automatic Coverage

Some companies in the state offer an automatic minimum primary liability to their international customers with no additional cost. But suppose you are a United States citizen and do not have the minimum requirement covered or cannot present the rental company with proof of it. In that case, you will have to buy SLI, LIS, or ALI from them to rent a car. You can also get non-owner liability or car insurance if you do not own a vehicle and get third-party liability insurance.

The only two damages that are automatically covered by the rental car companies in California are theft and vandalism. The California Civil Code Section 1936 states that all renters of vehicles are covered for theft and vandalism unless they do not exercise and practice ordinary care. If the vehicle is subjected to vandalism in a case where there is no theft, $500 is deductible. So, suppose you plan to practice ordinary care. In that case, there is not really a need to get purchase insurance for recovery and theft. No other automatic insurance is offered by the rental companies in San Francisco, California, and the price quotes of daily rates on the booking sites do not include coverage for any other thing. However, some overseas booking services for international visitors might have the cost of some additional policies incorporated in the quotes. It is essential to go through the terms and conditions of each rental company before you compare rates or book a car.

You must know to the full extent what your health insurance, credit card company, life insurance, personal liability policy, and auto insurance cover. Suppose you are paying the rent for your rental car with your credit card. In that case, there is a high chance that you get covered for some additional insurance policies through your card issuing company. However, the exceptions and exclusions of these companies may differ from the rental company, and they may have different maximum caps. Some credit card companies even sell these insurances to their customers as add-ons.

There is no hard and fast rule about which additional car rental insurance policies you should purchase or avoid. Different people have different risk profiles, insurance statuses, and life situations. Knowing the coverage, each policy offers and what all you are already covered for will help you make the perfect decision, saving you from paying for something you do not need. Remember, hiring a personal injury attorney in Sacramento and San Francisco, California, if you are involved in an accident with a rental car or in general is both critical and beneficial as they can help and guide you through all the legal steps you need to take and can get you settlement money that you deserve.

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Injury Lawyer, Anh Phoong, Esq.