Many drivers want to know if American Family Insurance covers rental cars, and the answer is yes in most situations. American Family Insurance covers rental cars when the rental car has the same coverage that already exists on your personal auto policy. This means if you have liability, collision, comprehensive, or full coverage on your insured vehicle, then those same protections will usually extend to the rental car. Your policy follows your personal vehicle and applies to rental cars used for personal use. This applies across the United States. American Family Insurance also offers rental reimbursement, which helps pay for the cost of a rental car when your own vehicle is in the repair shop after a covered accident. Not all drivers have this add on, so you must check your policy. If you only have liability coverage, you will not receive protection for damage to the rental car. Most rental agencies require collision and comprehensive protection, so American Family Insurance coverage must match those needs.
The most important part of this topic is understanding that your coverage mirrors your personal policy. If you have strong protection on your car, then your rental car receives the same level of protection. If your policy has higher deductibles, then the same deductible applies to the rental car if an accident or damage happens. Some drivers choose to buy rental car damage waivers from the rental agency to reduce risk. Others rely fully on their American Family Insurance policy if they have complete coverage. The choice depends on your budget, risk level, and comfort. Insurance companies treat rental cars in a similar way to borrowed cars, and this is a reason many drivers prefer a policy with full protection.
For drivers who want to understand how their car insurance reacts in different situations, reading guides on weather damage, mailbox incidents, and multi car accidents can help with deeper knowledge. This knowledge becomes useful when you drive rental cars because the same rules apply to liability and physical damage coverage.
How American Family Insurance Covers Rental Cars?
American Family Insurance covers rental cars under your existing personal auto insurance policy when you rent a car for personal use. Your liability insurance typically transfers to the rental car. This means if you hurt someone or damage property while driving the rental car, your personal policy pays up to the limits in your contract.
What protection usually transfers
- Liability coverage
- Collision coverage
- Comprehensive coverage
- Medical payments if included in your policy
- Uninsured or underinsured motorist coverage
The coverage applies only when you use the rental car for personal travel. Using the rental car for commercial work like deliveries is usually not covered. Many drivers use rental cars while their own car is being repaired after an accident. Rental reimbursement coverage helps with the cost of the rental, but it is an optional add on. Some insurers provide this benefit for a set daily limit and a total limit per claim.
What Rental Reimbursement Covers?
Rental reimbursement helps pay for a rental car when your own vehicle cannot be driven after a covered accident. It does not pay for a rental car used for road trips or vacations. It only pays when the loss is tied to a claim. Many drivers confuse this with rental car coverage used for rented cars during travel. These are different.
Rental reimbursement typically covers
- Cost per day for a rental car
- Total cost up to a policy limit
- Rentals needed during repairs after an accident
It does not cover
- Fuel costs
- Insurance sold by the rental company
- Rentals used for vacations
- Rentals used for commercial work
If you do not have rental reimbursement on your policy, you can add it at a low monthly rate. Many families who depend on a single vehicle add this coverage to avoid stress during repairs.
When American Family Insurance Does Not Cover a Rental Car?
Your rental car may not be covered in certain situations. These include
- Renting a car for business use
- Having only liability coverage
- Damaging the rental car without collision and comprehensive coverage
- Violating rental contract rules
- Allowing an unlisted driver to use the rental car
You also may not have full coverage for damage if your policy has restrictions or exclusions. For example, if your policy excludes certain drivers or vehicle types, those rules apply to rentals too.
How Deductibles Work With Rental Cars?
If your personal auto policy includes collision or comprehensive coverage, then damage to the rental car follows the same deductible. This means you must pay your deductible before insurance covers the rest. Some drivers buy a collision damage waiver from the rental company to avoid paying their deductible. The waiver shifts responsibility to the rental company, so you pay nothing out of pocket if damage occurs.
You can also adjust your deductible on your main policy. A higher deductible lowers your monthly cost, but it increases your payment after a rental car accident. A lower deductible increases your monthly cost but reduces your out of pocket cost after a claim.
Comparison Table for Coverage Scenarios
| Scenario | Does American Family Insurance Cover It | Notes |
| Personal rental car used for travel | Yes | Coverage mirrors your own policy |
| Rental car after accident repairs | Yes with rental reimbursement | Optional add on |
| Rental car used for business work | No | Most policies exclude this |
| Only liability coverage on personal car | Limited | Does not cover rental car damage |
| Full coverage on personal car | Yes | Includes collision and comprehensive |
| Driving outside the country | No in most cases | Policies vary by region |
Why Does Your Personal Coverage Matters?
Your rental car protection depends fully on your personal auto insurance. If you have complete protection, then your rental car receives the same benefits. If your policy is limited, then your rental car protection is limited as well.
Drivers with full coverage often feel secure using their rental car in any state. They know that collision and comprehensive protection will pay for damage caused by accidents, storms, theft, vandalism, or fire. Our guide on weather damage on cars helps explain the type of events covered under comprehensive insurance. Rental cars receive the same coverage under your policy when these events occur.
Drivers with liability only should be cautious. Liability does not pay for rental car repairs. You may pay the entire cost out of your own pocket if the rental car is damaged. Rental companies charge high fees for damage, including loss of use and other expenses.
Liability Coverage and Rental Cars
Liability coverage protects you if you injure others or damage their property while driving the rental car. Every state requires a minimum level of liability insurance. American Family Insurance meets all state requirements. Liability coverage follows you when you drive rental cars.
If you cause an accident while driving a rental car, your liability insurance pays for
- Injuries to others
- Damage to other vehicles
- Damage to property
- Legal defense if needed
It does not pay for damage to the rental car if you only have liability. That is why drivers choose complete coverage for protection.
Our article on how car insurance handles multi car accidents can help you understand how liability works, how insurers assign fault, and how coverage applies when more than one vehicle is involved. This is useful when dealing with rental cars because the same rules apply.
Collision and Comprehensive Coverage
Collision coverage pays for damage to the rental car caused by hitting another car or object. Comprehensive coverage pays for non collision damage such as fire, theft, hail, water, falling objects, or vandalism. Damage from storms is common. Many drivers ask about storm damage. Our guide on storm related claims helps explain how insurers pay for repairs.
American Family Insurance extends these protections to rental cars. If your personal policy includes these protections, the rental car is covered up to your limit. Deductibles still apply.
When You Should Buy Rental Car Insurance From the Rental Company?
Some drivers choose to buy rental company coverage even when they have personal insurance. The rental company offers a collision damage waiver and a loss damage waiver that remove your responsibility for damage. Drivers choose these waivers if
- They want no deductible
- They want to avoid claims on their personal record
- They have a high deductible
- They only have liability insurance
- They want extra peace of mind
If you travel often and rent cars in different states, waivers can reduce risk. However, they add extra cost to your trip.
How American Family Insurance Coverage Applies in Common Situations?
Situation 1
You rent a car for a family vacation. You have full coverage. American Family Insurance covers the rental car. Deductibles apply if damage occurs.
Situation 2
You rent a car because your personal car is in the repair shop after a covered accident. You have rental reimbursement. American Family Insurance pays the rental cost up to your policy limit.
Situation 3
You rent a car for work deliveries. This is commercial use. American Family Insurance does not cover it.
Situation 4
You only have liability insurance. You damage the rental car. American Family Insurance will not pay for the damage. You may owe the rental company for repairs.
Situation 5
You let someone not listed on the rental agreement drive the car. Damage occurs. Insurance may deny the claim because the rental contract was violated.
How to Lower Rental Car Risk When Using Your Personal Insurance?
Drivers can reduce risk and stress by following simple steps.
- Check your personal auto policy
- Confirm if collision and comprehensive are active
- Confirm your deductible
- Add rental reimbursement if needed
- Use safe driving habits
- Avoid violating the rental agreement
- Compare rental car waiver prices before renting
Some drivers worry about rental car claims increasing their insurance rates. A claim can lead to a higher premium depending on the severity. Reading guides on how car insurance rates change after accidents or weather damage can help drivers plan their coverage.
Frequently Asked Questions (FAQs)
Yes, if your personal policy includes collision and comprehensive coverage. These protections transfer to rental cars for personal use.
Yes, but only if you purchased rental reimbursement coverage. It pays for a rental car while your car is being repaired after a covered accident.
No. Liability coverage pays for injuries or property damage to others. It does not pay for damage to the rental car.
Yes. Your coverage applies in all states within the country. Damage outside the country may not be covered.
You may choose to buy it if you have liability only or if you want to avoid paying a deductible. Some drivers choose it to avoid filing claims on their personal policy.
Insurance may deny the claim if the driver is not listed on the rental agreement.
Yes. If your personal policy has a deductible for collision or comprehensive, the same deductible applies to the rental car.
Final Thoughts
American Family Insurance does cover rental cars when your personal policy includes full protection. Your coverage mirrors your own policy, so the level of protection depends on the type of coverage you carry. Rental reimbursement is a helpful add on that pays for a rental car after an accident when your car is in repairs. Drivers who do not have full coverage may want to buy rental company waivers to avoid out of pocket costs. Understanding how your policy works helps you stay protected during travel and avoid surprise charges. For drivers who want better coverage options and a simple way to compare insurance policies, Alias Insurance provides trusted support and easy access to top rated insurers.
