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Does car insurance cover me when I drive a rental car?
Skip the coverage at the counter if your car insurance already covers rental cars.
Updated . What changed?
You’ve picked a rental car and are ready to zoom off on vacation. Then the representative at the desk asks if you want rental car insurance. As it turns out, most people won’t need separate rental car insurance. The rental car insurance you’re offered at the counter is not required, and certain types of coverage may be unnecessary if you’re already covered by your own insurance.
What's in this guide?
- Am I covered when I drive a rental car?
- How does my car insurance cover driving a rental car?
- How credit cards cover rental cars
- How travel insurance covers rentals
- How health insurance covers rentals
- How home insurance covers personal belongings theft
- Do I need to buy extra rental coverage?
- Types of rental car coverage to consider
- Where to buy a separate policy
- How to protect yourself from a claim
- Bottom line
- Questions about rental car coverage
Am I covered when I drive a rental car?
Yes, your other insurance policies typically include some rental car coverage by default. If you don’t have any of these policies or they don’t include enough coverage, you can buy separate rental car insurance. Rental car insurance covers you in case something happens while you’re driving a rental, including for car damage, accident-related medical payments or hitting someone else’s property.
When you’d already have rental car coverage
Most car insurance companies cover driving a rental car with the same coverage as your own car on your policy.
Your credit card may offer some insurance for rental cars if you pay for the rental with your card.
Travel policies might come with rental car coverage and personal contents coverage to protect your belongings.
Home or renters insurance
Your luggage and anything in your car are typically covered by your home or renters policy.
Your health insurance will typically pay for treating accident injuries unless you’re driving abroad.
How does my car insurance cover driving a rental car?
Any coverage you keep on your existing policy should extend to a rental car — as long as you’re not using the rental for business.
For example, the same liability limits on your car insurance policy will apply to the rental. Your car insurance may also pay for some medical expenses if you bought medical payments coverage or personal injury protection.
Check your policy documents to find out how your coverage extends to driving a rental car. Typically, policies cover:
- Repairs to the car
- Towing the rental to a repair shop or the rental location
- Loss of use for the rental company while the car is being fixed
- Diminished value if the car is worth less after the accident
- Deductibles and fees
When car insurance might not be enough
Consider taking out the extra rental coverage if you’re not covered through personal insurance policy. If you’re not sure, it pays to call your insurance company for better understanding. Reasons you might need extra rental car insurance:
- Your own car is cheaper than the rental. If you have $10,000 in liability coverage but total a brand new rental car, your car insurance might not cover the whole cost of damage.
- You have liability-only insurance. Low-limit insurance works great for a beater but not so much for a newer rental car. Add collision coverage through the rental company for broad protection.
- You keep high deductibles. If your current policy includes a deductible at or over $1,000, think through whether you can handle that out-of-pocket expense.
- You have commercial car insurance or are renting for business. A business auto policy won’t extend to driving a rental for personal use. Likewise, your personal policy won’t cover a rental car used for business travel.
- Someone else will drive the rental. Because you’ll need to tell the rental company who’s driving the car, uninsured drivers will need coverage.
- You’re driving luxury. Luxury rentals aren’t always covered by car insurance. If you’re renting a high-end car like a Maserati or Lamborghini, check with your insurer before turning down the rental company’s coverage.
- You’re driving abroad. Many car insurance policies won’t cover driving to Canada, Mexico or anywhere else abroad.
- You’re renting an RV or motorcycle. Some companies will cover motorcycle rentals, but not every one insures rental recreational vehicles.
How credit cards cover rental cars
If you pay for your car rental with your credit card, you could get basic protection. That can include theft, collision or towing coverage — and sometimes medical bills or personal property protection. However, credit card benefits come with limitations, like covering you for a short time or limiting coverage to $50,000.
Also, ask your credit card company if its insurance is primary or secondary. Secondary benefits mean you’ll file a claim on other relevant policies before filing with your credit card. Many cards offer secondary coverage, or they’ll act as primary coverage when you don’t have other insurance. For example, both Visa and Mastercard act as secondary coverage to car insurance, with some exceptions.
If you’re traveling across the ocean, some countries require a collision waiver while others don’t. Check with your credit card and rental car companies for the country you’re driving in.
How travel insurance covers rentals
Your trip insurance might include a damage waiver for your rental car, helping you bypass the need to buy this protection. This damage waiver releases you from the responsibility of paying for the rental car’s damage after an accident.
Along with the damage waiver, you can get protection for trip interruptions or cancellations. If an emergency arises and you can’t make or continue your trip, the travel policy could pay for your rental car’s nonrefundable expenses. Check your travel insurance policy to understand your coverage, or shop for road trip travel policies.
How health insurance covers rentals
Your health insurance can cover any medical bills if you’re in an accident in your rental car. You may want to combine your health coverage with your car insurance, since MedPay and PIP can help cover medical costs, including your health insurance deductible.
How home insurance covers personal belongings theft
Most home or renters policies include off-premises coverage for your belongings. In this case, your personal belongings are protected even while they’re away from home. Your luggage, electronics and other items traveling with you in the rental would be covered up to the policy’s limits.
However, some policies lower coverage limits when the items aren’t at home, such as 10% of your personal belongings coverage.
Do I need to buy extra rental coverage?
The main reason you’d need rental car insurance is if your own policy doesn’t protect you. Your existing insurance should cover rental cars — but it’s a good idea to make sure. Check your own policy or call your insurance agent.
Also, the benefit of buying extra rental insurance is that you won’t mess with your personal car insurance policy if an accident happens. The extra coverage could give you extra peace of mind and leave you with less out-of-pocket expenses than car insurance, especially if it offers a low or no deductible.
Types of rental car coverage to consider
You’ll come across four types of coverage when looking at insurance from the rental company or through temporary car insurance:
Personal accident insurance
Personal accident insurance covers you and your passengers in an accident. You’ll have protection for medical assistance, an ambulance or death up to your coverage level.
Should I get it? You probably don’t need medical coverage if you have health insurance. It could be worth buying if you’re worried about a death benefit and don’t have life insurance. Common coverage limits you’ll see:
- Typical cost: $3 per day
- Medical coverage: $3,500
- Ambulance coverage: $150
- Death benefit: $175,000 for renter; $17,500 for passenger
Collision damage waiver
With a collision damage waiver, you pay a reduced cost or nothing at all if your rental car is stolen or damaged. Rather than providing coverage, the waiver releases you from any car damage responsibility. This waiver is also called a CDW, physical damage waiver or loss damage waiver.
Should I get it? Double-check your auto insurance since it should cover damage to rental cars. If so, you don’t need the extra coverage.
- Typical cost: $25 per day
- Coverage: Varies depending on rental car agency
Personal effects coverage
Personal effects coverage reimburses you for theft of your possessions from the rental car. This coverage can extend to family as well.
Should I get it? Coverage for stolen items falls under most homeowners or renters insurance. If you have one of these policies, you can skip this option unless you’re traveling with expensive items.
- Typical cost: $3 per day
- Coverage: $500 to $1,500 per person
Supplemental liability protection
Supplemental liability will cover you if you damage someone’s car or property or if you’ve caused medical injuries to someone else.
Should I get it? You should have liability coverage on your own car insurance policy. If you think your coverage limit is too low, supplemental liability protection can help.
- Typical cost: $11 per day
- Coverage: $1 million
Where to buy a separate policy
Aside from free coverage on other policies you have, you can buy rental car insurance in two ways:
- The rental car company. When you rent a car, the representative at the counter will ask whether you’d like to add insurance. Understand what your personal insurance covers beforehand, so you can make a smart decision.
- Temporary car insurance. Some specialty companies deal with insuring cars on a temporary basis with a focus on rentals. Using this third party means you can shop around for the best deal, rather than accepting whatever the rental company charges.
What you can expect when buying separate rental car insurance:
|Company||Collision damage||Extra coverage||Policy cost|
|Chase Sapphire Preferred credit card||Up to actual cash value of the rental for theft and collisions||
||$95 annual card fee|
|Enterprise||Varies by rental and location||
||Varies by rental and location
How to protect yourself from a claim
Car rental companies don’t often make damage claims against customers, but this situation can happen. If it does, you could be on the hook for hundreds or even thousands of dollars without an insurance company’s help.
Take these steps to protect yourself from a possible damage claim:
- Inspect the rental car with an employee and note in writing all of the existing damage, no matter how minor.
- Take pictures of any damage before leaving the lot and make sure the photos are time stamped.
- Take pictures again once you drop the car off and make sure the photos are time stamped.
Even if you’re covered against damage, you can take precautions to make sure you’re not held liable. Some rental companies require that you inspect the car before they turn over the keys.
What should I do if a rental company files a claim against me?
If you couldn’t document the existing damage before and after you drove the rental, you’re not out of luck. A few ways you can contest the claim:
- Request time-stamped photos of the car immediately before you rented it and immediately after you turned it in.
- Ask if the company rented out the car again after you turned it in and before sending the claim letter to you.
Putting a little heat on the rental company to provide evidence could pay off and save you a ton.
You probably won’t need to buy rental car insurance. However, it can be a smart choice if your personal car insurance lacks coverage in certain areas.
Questions about rental car coverage
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