Do I need special road trip car insurance?


Paul Sisolak

Paul Sisolak

Blog author Paul Sisolak

As a personal finance journalist, Paul specializes in financial literacy, loans, credit scoring and the art of negotiation. He's covered some of the nation's most inspiring financial success stories for national publications including CNN, and US News & World Report and has a passion for helping Americans overcome their debt.

Published July 17, 2017|6 min read

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The time has finally come to take that road trip you’ve been talking about since way back in the dead of winter, and you’ve planned everything to go without a hitch.

Routes all mapped into your GPS? Check. Budgeted for gas, food and motel? Check. Money and time left over for some spontaneous exploring? Check.

What about your auto insurance?

If you already have auto insurance, why worry, right? And, if you don’t, is a full car insurance policy necessary?

Well, think about it for a minute: Anything can happen on a road trip. You might get in an accident, get your car stolen, or have it stomped on by a band of mischievous monkeys during that drive-thru safari trip. Plus, what happens when you’re too tired to drive, but none of your passengers have car insurance? Can they take the wheel? What about if you’re taking a rental car instead of your own? Is there such a thing as road trip insurance? And what kind of coverage do you need if you’re driving outside your home state?

Fortunately, these "what ifs?" don’t need to put a roadblock between you and your big adventure. Just add an auto insurance checkup to your pre-trip checklist. Here’s what to know.

I have car insurance. Do I need special road trip insurance?

If you have auto insurance, and you’re taking your car, your coverage applies to your big adventure. Still, even if it’s a solo trip and you’re the sole driver, a phone call to your insurer is in order.

"If you’re using your own vehicle to road trip, you legally have to be insured with the minimum liability insurance," Derek Benavides of TWFG Insurance in The Woodlands, Texas, says, but "the amount of liability insurance varies from state to state."

So, if you’ll be driving across state lines, consult with your insurance company about whether your in-state coverage will suffice. It should, says Mike Kariotis, owner of Chicago insurance company Insure on the Spot.

That’s because most insurers have what’s coined a "broadening clause" in their policies that allows you to extend your liability coverage, albeit temporarily, up to standards of the state(s) you’ll be visiting.

Even if your auto insurance has you covered in terms of liabilities, consider some supplemental insurance that beefs up roadside assistance, since some plans limit to how far they’ll tow an incapacitated car. You can get this insurance through your provider or even your car’s manufacturer, like if the vehicle is still under warranty. Or you could look into a third-party provider, such as AAA Roadside Service.

"(It) can be a vacation saver should you experience mechanical failure, flat tire, dead battery, or even lock your keys in the car," Benavides says.

The cost of a AAA membership can be minimal, depending on what plan you sign up for and where you live, Benavides says. For frame of reference, the triple tier of AAA plans in the U.S. southern region costs from $59 (Classic), $94 (Plus) and $120 (Premier). The right plan for you depends on the level of service you desire,or the amount of traveling you’ll be doing. You can learn more about AAA here.

Bonus tip: Before signing up for supplemental coverage, check your credit card: It might have built-in roadside assistance you weren’t aware of. Some credit cards from Citi, Chase and American Express, for example, offer their own dispatch service.

Do I need rental car insurance if I have auto insurance?

Things get more complicated if you’re renting a car and leaving yours at home. If you have auto insurance, your policy could extend to the rental car.

But whether you need to purchase extra insurance from the rental company depends on the car you’re renting, Benavides says.

"If you currently have an auto insurance policy, then in most states, your auto liability insurance will transfer over to cover the rented or borrowed vehicle," he says. "With that being said, if you carry low limits of liability — say $30,000 in property damage — and you rent a brand new Cadillac worth $50,000, if you wreck that Cadillac and it's a total loss, your liability insurance will only pay the rental agency $30,000. The other $20,000, plus loss of use for the rental agency, plus other potential charges, will be owed by you."

In this case, it’s wise to buy the extra rental car insurance, but if you’re renting a vehicle of equal or lesser value, you probably won’t need it. Again, your credit card can come in handy here, since those ancillary auto benefits may also include rental car coverage.

Do I need coverage for anyone uninsured?

If they’ll be driving at any point during the road trip, yes.

Moreover, if you don’t have insurance and plan to drive someone else’s car, you need to buy coverage, since it’s illegal to drive a car without it.

But a few scenarios come into play here: If you have auto insurance, you can add drivers onto your policy. Be sure to consult with your insurer about what coverage your policy provides for additional drivers, since state laws apply.Alternately, you and/or your companions can buy a non-owner car insurance policy, which provides a certain level of coverage to drivers that don’t have their own car. (You can go here to learn more about the ins and outs of non-owner car insurance.)

What if you’re renting a car, and you and your uninsured passengers have no auto insurance, but you all plan on rotating driving duties?

"If you do not have a current auto insurance policy and you rent a vehicle, it will be required that you purchase their liability insurance," says Benavides. "This way, if you do get into an accident that is your fault, you will have liability insurance to cover property damage and/or bodily injury."

Non-owner’s coverage and a rental agency’s insurance are legally enough to drive a car on the road. However, in both cases, the liability coverage will only be enough to pay for damages to the other party’s property or vehicle. It won’t include other insurance standards, like comprehensive or collision coverage, so you or your uninsured passengers will still be on the hook for other expenses.

"While it’s not a requirement, it’s always a good idea to get (full) insurance if you’re planning a road trip — especially if you’re planning the trip in a rental," says Korey Adekoya, business development manager at Shabana Motors in Houston.

Taking your car insurance on the road

When you buy an auto insurance policy, the best way to get the most coverage and save money is to tailor your plan so everything — from liability to comprehensive to collision and personal injury protection — is at the level you need when you drive locally.

Use the same principles when you’re gearing up for a road trip, whether in state or out.

"The first step is to evaluate your current plan and see if it covers out of state travel and liability protection for enough passengers," Adekoya says. "If not, you can supplement your plan for the duration of the trip."

Overall, says Adekoya, make an insurance itinerary the same as you would when planning where you’ll go on your road trip to ensure you and your passengers have optimal coverage.

"Most rental places offer protection, but this can get expensive fast and there are plenty of other options on the market," he says. "Think about where you’ll be travelling and make a list of what you’ll need to be covered for."

Paul Sisolak

Blog author Paul Sisolak

As a personal finance journalist, Paul specializes in financial literacy, loans, credit scoring and the art of negotiation. He's covered some of the nation's most inspiring financial success stories for national publications including CNN, and US News & World Report and has a passion for helping Americans overcome their debt.