One of the most stressful things about renting a car is understanding what all the different kinds of insurance cover. You may wonder if you need the rental car company’s supplemental liability insurance (SLI). Here’s everything you need to know about this insurance option.
What is Supplemental Liability Insurance (SLI) for a Rental Car?
If you are in an accident, SLI covers damage caused to other parties’ vehicles, as well any expenses due to bodily injury or death. Unlike Personal Accident Insurance (PAI), SLI focuses on covering the expenses that come from harming people or objects outside of your own rental car. You can purchase supplemental liability insurance from the rental car company at varying prices. For example, Enterprise’s policy averages between $8 and $17 per day, depending on the pickup location. Budget’s policy is a flat $15 per day.
Do You Need To Purchase SLI When Renting a Car?
In the U.S., every state requires a minimum amount of liability insurance. You may already have liability coverage through your personal auto insurance if you own a car. But understand that the minimum amount of liability insurance varies by state and may not be enough. If a state requires a minimum of $25,000 in liability coverage, that is unlikely to cover all the potential expenses.
You may also have “umbrella liability insurance,” a low-cost policy added to your auto, homeowner’s or renter’s insurance. It can provide extra protection while driving your car or a rental. Also, be aware that U.S. auto insurance policies often don’t provide any coverage abroad. You may want to — or you’ll be required to — purchase liability insurance if you’re traveling overseas.
How Much Supplemental Liability Insurance Do You Need?
Experts suggest carrying liability insurance at least equal to your net worth. Whether you need to purchase supplemental liability insurance largely depends on if you have an auto insurance policy. If you don’t own a car, it’s wise to take the supplemental option to make sure you’re covered.
If you plan to purchase supplemental liability insurance from the rental car company, check whether it will be sufficient based on your net worth. Be sure to read the fine print about the coverage limits for supplemental liability insurance (SLI). For example, National Car Rental recently changed its policy limit to $300,000 in Supplemental Liability Protection (SLP). Its sister companies Enterprise and Alamo also offer that amount. Avis, Budget and Thrifty offer SLI limits of up to $1 million or $2 million, depending on the state.
You may not need this extra liability coverage if you already have a personal auto insurance policy. Before renting a car, check your personal auto insurance policy to see the coverage limit.
The Bottom Line
If you don’t have personal auto insurance, buying SLI from the car rental company will help protect you in case of an accident. However, you’ll want to check whether the amount of coverage offered under this policy is equal to your net worth. If using a personal auto policy, make sure the liability coverage applies to rental cars.