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What is LIS on a Rental Car?

Published in Rental Car Insurance 3 mins read

LIS on a rental car stands for Liability Insurance Supplement, an optional coverage offered by rental car companies that significantly increases your liability protection beyond the basic, state-mandated minimums.

Understanding Liability Insurance Supplement (LIS)

LIS is an additional insurance product designed to protect you financially in the event you are responsible for an accident involving your rental car. It specifically covers claims made against you for bodily injury to others or damage to their property.

What LIS Provides

When you rent a car, the rental company typically provides basic liability coverage, which often only meets the minimum legal requirements of the state where the car is rented. These minimums can be very low and may not adequately cover the costs of a serious accident.

LIS enhances this protection by offering a substantial increase in coverage. For instance, it can safeguard your existing insurance policy and/or your personal assets by providing coverage up to a higher limit, such as an initial $1 million, which may be adjusted to $300,000 effective at a later date. This extended coverage helps ensure that if claims are made against you due to an accident, you have a much higher financial buffer against potential lawsuits or significant damages.

Why Consider LIS?

Purchasing LIS can be a wise decision for several reasons:

  • Higher Protection Limits: State minimum liability coverage is often insufficient for severe accidents, where costs for medical bills and property damage can quickly escalate. LIS offers a much higher ceiling for financial protection.
  • Protection for Personal Assets: Without adequate coverage, your personal assets (savings, home, investments) could be at risk if you're found liable for damages exceeding your insurance limits. LIS acts as a strong barrier against such financial exposure.
  • Peace of Mind: Knowing you have substantial coverage can reduce stress while driving, especially in unfamiliar territories or busy urban environments.
  • Supplementing Personal Auto Policy: While your personal auto insurance policy might extend to rental cars, it may not offer the same high liability limits that LIS provides, or it might have a high deductible. LIS can fill these gaps.

LIS vs. Basic Liability Coverage

Here's a simplified comparison to illustrate the difference:

Feature Basic Liability Coverage (Included) Liability Insurance Supplement (LIS) (Optional)
Coverage Limit State minimums (often low, e.g., $25,000) Significantly higher (e.g., up to $1 million, or $300,000 from a specific date)
Protection Scope Covers costs of damage/injury to others Covers costs of damage/injury to others, plus safeguards personal assets/existing policy
Cost Included in rental rate Additional daily fee
Primary Purpose Fulfill legal requirements Offer robust financial protection against large claims

Making an Informed Decision

Before opting for LIS, it's advisable to:

  • Review Your Personal Auto Insurance Policy: Check if your existing policy extends coverage to rental cars, including your liability limits. Some policies offer robust coverage that may make LIS redundant.
  • Check Credit Card Benefits: Many credit cards offer some form of rental car insurance as a benefit, but these are typically secondary and often only cover damage to the rental car itself (Collision Damage Waiver – CDW), not liability for damage to others.
  • Assess Your Assets and Risk Tolerance: If you have significant assets, higher liability coverage from LIS can provide crucial protection.

While LIS is an additional cost, its value becomes apparent in the event of a severe accident, potentially saving you from substantial out-of-pocket expenses and legal complexities. For more general information on rental car insurance, you can refer to resources like this Investopedia guide on rental car insurance.