Last Updated on October 31, 2024 by Elizabeth
Planning to rent an electric vehicle (EV) on your next trip? Maybe you want to take an extended test drive. Or perhaps you simply want to reduce your carbon footprint. Either way, it’s easier than ever to rent electric cars. Just be aware that there are some potential pitfalls of car rental insurance for electric cars.
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In general, it’s more expensive to insure an electric vehicle than a gas-powered vehicle. The additional risk has nothing to do with the driver and everything to do with the technology in the car. As the purchase price of electric cars falls, so will the cost to rent an EV and buy car rental insurance.
Car rental insurance through personal auto insurance
Many car renters waive the insurance at the rental counter and rely on their personal car insurance. But before renting an electric car, check to see if your auto insurance policy covers renting an EV, whose value may exceed your policy limits.
Car rental insurance through a credit card
In almost all cases, credit card rental car insurance policies won’t cover specialty vehicles. These include motorbikes, high-capacity vans, cargo vans and recreational vehicles. Similarly, most policies don’t cover peer-to-peer car rentals — such as those through Turo.
At this time, it’s a mixed bag for electric vehicles. Some credit cards will cover rented EVs and others won’t. If you are used to relying on using a premium credit card that provides primary car rental insurance, find out if your card’s coverage includes EVs.
Some credit cards, like the Chase Sapphire Preferred, explicitly exclude Teslas and other “high-value motor vehicles.” Others, like the Capital One Venture X Rewards card, exclude rental cars valued above $75,000 when new. That limit would currently cover the Tesla Model 3 but not some other EVs.
Finally, the fine print of some credit card providers distinguishes between mechanical issues and electric issues. For instance, American Express rental car insurance policies generally exclude coverage for “electrical breakdown or failure,” which is an obvious problem with an EV.
Here are a few things to watch out for with car rental insurance when renting an EV:
Limited coverage for the battery
The battery is one of the most expensive components of an electric vehicle. However, some car rental insurance policies may have limited coverage for the battery. This means that you may be liable for any damages to the battery, which can be costly to repair or replace.
High deductibles for electric cars
Car rental insurance policies may have high deductibles, which is the amount you need to pay out of pocket before the insurance coverage kicks in. This can be a significant expense, especially if you are involved in an accident or damage the vehicle. You should check the deductible amount and make sure that you can afford it before purchasing insurance.
Exclusions for off-road use of electric cars
Electric cars are designed for use on the road, so car rental companies and car rental insurance policies may have exclusions for off-road use. If you are thinking of using an electric car for off-road adventures, you need to make sure that your insurance policy covers this type of use.
Exclusions for charging the battery
Charging the battery is an essential part of using an electric vehicle. However, some car rental insurance policies may have exclusions for damages that occur during charging. This means that you may be liable for any damages that occur while charging the battery, which can be costly.
Exclusions for driving outside the rental country
If you plan to drive the electric car across a border, you need to make sure that your insurance policy covers it. Some car rental insurance policies may have exclusions for driving outside of the rental country, which can leave you without coverage if you are involved in an accident.
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Remember, rental car insurance is a valuable protection when renting an electric vehicle. But it’s important to be aware of the potential pitfalls of car rental insurance with electric vehicles, not least of all limited coverage for the battery and high deductibles. It’s essential to carefully read and understand the terms and conditions of your car rental insurance policy to ensure that you are adequately covered during your rental period.
When in doubt, you might be better off ponying up for the admittedly high insurance offered at the rental car counter.
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