Do I Need Rental Car Insurance In California?

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Whether you are a California resident or visitor, there are various reasons you may rent a car in this state. When you rent a vehicle, you face an array of insurance choices, and they can all seem confusing. What is required? Do you need to purchase additional coverage? It is important to understand what California law says about car rentals and insurance before you rent a vehicle.

Rental Cars and Insurance

California ranks among the top states for annual car rentals, which makes sense considering this is a top tourist destination. Drivers in this state who rent a car must carry proof of liability insurance (whether their own insurance for the car rental contract if liability coverage was purchased). The minimum insurance requirements for vehicle drivers in California are as follows:

  • $15,000 for injury/death to one person
  • $30,000 for injury/death to more than one person
  • $5,000 for damage to property

However, it is important to note that each state has different requirements concerning minimum insurance. Rental car companies in California do not automatically provide liability protection as part of their standard rental agreement.

The only required coverage that drivers must have when renting a car in California is third party liability (you already have this if you have local liability coverage through your personal carrier). This coverage includes damage that occurs to someone else (whether personal injury or property damage). In an accident, potential liability for a rental car driver can be very large, particularly if severe injuries occur.

To answer whether or not you need rental car insurance, yes, you do need this limited coverage. However, sticking to the minimum required liability coverage may not be the best plan for renters in California.

While additional insurance coverage provided by the rental company may cost more, the amount may be worth it if an incident does occur. Some other types of coverage that a renter may want to consider are:

  • Collision damage of rental car. Coverage available includes loss damage waiver (LDW) or limited loss damage waiver (LLDW). Covers damage to the rental car.
  • Theft of rental car if renter is careless. Coverage available includes loss damage waiver (LDW). This will help if a renter leaves the keys in an unlocked car or otherwise contributes to the vehicle being stolen.
  • Medical bills if renter is hurt. Coverage available includes personal accident insurance (PAI). This is recommended if the renter does not have health insurance and is worried about smaller medical bills under $2,500 from accidents.
  • Theft or damage of renter’s property. Coverage available includes personal effects coverage (PEC) and is designed to protect valuables that may be stolen from the vehicle.

Risks to Renters are Real

Risks to those who rent cars in California for real and can be incredibly costly. While It is absolutely vital that renters follow the minimum insurance requirements when they rent a vehicle, they should also seriously look obtaining additional coverage specific to their situation. Check with your credit card company to determine what type of coverage they provide for rental cars because they often carry automatic coverage that may overlap with coverage that is available through the rental company. It is always better to be protected in the event a car accident or some other event occurs.