Most major rental car companies offer this insurance for auto rentals. Supplemental liability coverage can also be suggested as an option by moving-truck rental companies or peer-to-peer ride-sharing companies for hourly or daily trips. With peer-to-peer ride-share apps or platforms, this insurance may be included with the service. ALI policies for different sectors can vary based on which state you’re in.
Alternate name: Supplemental liability coverage, liability insurance supplement, or liability protectionAcronym: ALI, SLP, or LIS
For example, let’s say you sign up for the liability insurance supplement when you rent a car through Hertz and injure another driver in an accident. If the other driver’s medical costs total $100,000, your rental LIS may pay those costs and you won’t need to report the claim to your own insurance company. However, your auto policy may not cover box truck or moving rentals. You may need to obtain supplemental insurance just in case you injure someone while operating a moving van.
How Additional Liability Insurance Works
To use additional liability or supplemental insurance, you must sign up for the coverage when first renting the car for an additional per-day charge. It is an optional coverage, and you can decline supplemental liability if you wish. Insurance coverage amount and type can vary based on state. For example, coverage may be for up to $300,000, $1 million, or $2 million. This coverage may be more than your personal auto policy or duplicate your own auto or umbrella policy. Coverage and coverage amounts may or may not include damages caused by uninsured and underinsured motorists, depending upon the state you rent in and the rental agency. If a state requires the rental agency to provide uninsured motorist/underinsured motorist coverage, the standard liability policy will likely include uninsured/underinsured coverage. If you’re involved in an accident, follow your rental agency’s instructions for reporting an accident. If a claim has been filed against you, you may be asked to send written notice to the insurer.
What Does Additional Liability Insurance Cover?
Additional liability insurance or supplemental liability insurance will likely cover the following up to the policy’s limits:
Claims by other drivers regarding injury or death you’ve caused while driving the rental vehicleClaims for property damage you’ve caused in your rental vehicleDamage from uninsured or underinsured motorists, depending on state and company
What’s Not Covered by Additional Liability Insurance?
Additional liability won’t cover everything. Costs that ALI likely won’t cover include:
Bodily damage to you, family members, or other household members Property damage to your rental vehicle Fines or other fees Damage sustained in Mexico Property damage or bodily injury that occurs due to car use that’s prohibited, such as driving under the influence of alcohol or drugs Business use of a rental vehicle
Decide Whether You Need Additional Rental Car Coverage
Before you accept supplemental liability insurance, call your insurance company and the rental or ride-sharing agency to find out what’s covered, what isn’t, and how rental car coverage works in your specific situation. Additional liability insurance could make sense if you:
Have an existing auto policy, but limits are low or don’t cover your rentalHave assets such as a home or savings you need to protect against claimsAlready have claims on your auto history that are keeping your insurance rates highDon’t want a new possible claim on your auto recordWant to participate in a car-sharing program and your insurance doesn’t cover such programs or rentals
Supplemental liability insurance might not be a good fit if you:
Already carry high-limit personal auto or umbrella policies that cover your car rentalAren’t concerned about an expensive claim damaging your assets or auto insurance ratesFind out that the rental includes a high-liability coverage amountRent cars so frequently that increased limits on your policy might make more financial sense, even if a claim occurs
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