How well do you think your auto policy would cover the four types of liabilities I list earlier? Because personal auto policies vary somewhat, it’s always best to check with your agent or insurer prior to renting, but here’s the norm:

• Injuries and property damage that you cause as a driver: Usually you’re covered up to your liability policy limit.
• Damage to the rental car that you cause: You are covered only if you have collision and comprehensive coverage on at least one of the vehicles on your policy, subject to your deductible. You are not covered otherwise; in this case, you may need to buy the collision-damage waiver coverage from the car rental company.
• Damage to the rental car that you didn’t cause: You have contractually agreed to be responsible for all damage, regardless of whether you caused it. Again, you are covered only if you have collision and comprehensive coverage on at least one of the vehicles on your policy, subject to your deductible. You are not covered otherwise. Be sure to check with your insurance provider prior to renting a car to see exactly how your policy will apply, because policy language varies from company to company. Also, ask your agent to advise you about any state laws that may affect your coverage.
• Rental company’s lost income while a damaged car is being repaired: You may be covered only if you have loss-of-use coverage on at least one vehicle on your policy, and then only up to your loss-of-use policy limit (usually $20 to $50 per day). Your coverage depends on your insurance company. You’re covered only up to a limit – for example, $20 a day. If you buy the optional collision-damage waiver coverage from the rental company, loss of use may be covered in full.

Courts have ruled that rental companies can only charge you for their lost income on a car you return with damage if they had no other vehicles available to rent.