Many people use car rental for many different reasons, and there are many different ways it can impact on their own car insurance policies. The two main ways are firstly in terms of the cost of a drivers own car policy and the additional cost of having vehicle hire included as an optional extra, also the cost of having to hire the vehicle in the event of a claim and not having included it in the insurance policy.
The other cost is when someone who has their own car and car insurance hires a car and uses their own car insurance to cover them in part when they are driving the hire car, rather than using the insurance provided by the hire car company. This can be quite a complex area and potential fraught with difficulties, but can represent quite a significant sum financially.
The first area involves the optional extra of including hire car coverage with your insurance policy. This option will most likely only be available to people who take out fully comprehensive insurance and have the possibility of this extension being included or not. Insurance companies offer these types of extra or additional cover as a way of earning money really and each policy needs to be assessed on its own merits. Most insurance companies will offer the facility of a hire car in the event of the insured person's own car being unavailable, normally as a result of a potential claim for theft or because the car has been involved in an accident and isn't drivable. Insurers will normally offer this facility for a limited period of time, say fourteen days.
They will most likely make a charge for it, although some insurance companies will make a point of offering it without charge as a benefit or selling point of their company's policy. It is a risk factor, in the sense that if you are dependent on your car because of work or school runs etc its most likely that you will need to hire a vehicle in the event of yours becoming unusable as a result of an accident or if it is stolen. Obviously the cost of this could be quite significant, especially if the need to hire a car exceeded fourteen days or however long the insurance company might have paid for the use of a hire car for.
That is a calculated risk that the driver or insured person will make when getting a quote and obtaining their car insurance initially.
The second area, as outlined above is where a diver uses his own insurance policy to cover himself/herself when driving a hire car or vehicle. The important thing here is clarity. The driver must be clear that his own insurance policy allows him to do that, or get a policy extension authorizing it.
The hire car company will probably want a minimum level of insurance cover effected with them, irrespective of whatever cover the driver may have additionally.
The author is a freelance writer who specializes in insurance having spent many years in the insurance industry, working at Lloyd's of London, in particular he writes about car and auto insurance explaining what car insurance is for and the related area of car insurance.