It can be incredibly confusing to understand whether or not you need insurance when you rent a vehicle in Michigan. Of course, the rental car company may not be much help because it is in their interests to get you to purchase an optional insurance plan (hint: they make more money). However, we do not want to discourage you from purchasing additional insurance because it may indeed be beneficial. But, we do want you to be aware of your options and of the fact that you may already be covered by an insurance policy when you rent a vehicle.
What Insurance Covers You Already?
Many people do not realize that they are usually already covered under various types of insurance policies when they rent a vehicle. This can include the driver’s personal auto insurance policy that will carry over to the rental vehicle and maybe even an insurance policy provided by a credit card used for the rental purchase.
Depending on where the driver of the rental car is from, they may be covered by their own auto insurance. Usually, drivers who do not carry additional insurance provided by the rental company can only do so if they have their own auto insurance period the state of Michigan requires every driver to carry at least the following:
- Bodily injury liability coverage: $20,000 per person and $40,000 per accident
- Property damage liability coverage: $10,000
- Property protection: $1 million
- Personal injury protection: Unlimited with various deductibles
Michigan is a no-fault state, which means drivers will turn to their own insurance carrier to recover compensation after most vehicle accidents. However, if the rental vehicle operators are from another state, they may come from a place without no-fault insurance. However, if the accident occurs in Michigan, then it will be handled on a no-fault basis regardless of what type of auto insurance the individual has.
Most individuals are also covered by some type of insurance provided by their credit card. Major credit cards offer some sort of rental car coverage through their networks. However, the particular coverage provided will vary depending on the issuing bank. Our Southfield accident attorneys strongly encourage you to investigate the type of insurance provided by your particular credit card, especially if you use that card to pay for the rental car.
What the Additional Insurance Policy Covers
The no-fault insurance in Michigan will not cover property damage or theft if a rental vehicle is damaged or stolen. Credit card insurance coverage may provide this type of protection, but not always. The credit card coverage may actually exclude certain types of vehicles, which is why we encourage you to check with your credit card company before deciding whether or not to purchase additional rental car insurance coverage.
Drivers should consider buying the insurance offered by the rental company under a few different circumstances. This includes:
- If the driver does not have Michigan auto insurance coverage or coverage from another state
- To ensure they have property damage and theft coverage if this is not already covered through another insurance policy
- If the credit card company does not pay for property damage or theft through their own insurance policy
If you do decide to purchase the coverage through the rental company, make sure you know how many drivers are covered and if any drivers in your party will specifically be excluded.
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