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Do I need rental car insurance?

Skip the coverage at the counter if your car insurance already covers rental cars.

This article was reviewed by Andrew Flueckiger, a member of the Finder Editorial Review Board and certified insurance counselor and licensed insurance agent in five states.

You’re ready to zoom off with your rental car when 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 — it’s not required and some coverage may be unnecessary if it’s already on your own insurance policy. But this temporary policy can help in some situations, like if you keep only the minimum coverage required on your car insurance.

Does my car insurance cover rental cars?

Any coverage on your existing auto insurance policy should extend to a rental car — as long as you’re not driving for business. Check your policy documents to find out how your coverage extends to a rental car.

Policies may cover:

  • Repairs to the car
  • Towing to a repair shop or the rental location
  • The rental company’s lost income during car repairs
  • Diminished value if the car is worth less after the accident
  • Deductibles and fees

Example

Your $50,000 of property damage liability on your personal policy should apply to the rental if you hit someone’s car. Also, your medical payments or personal injury protection should pay some medical bills if you bought this coverage.

When you already have rental car insurance coverage

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 car damage, accident-related medical payments or hitting someone else’s property.

Car insurance

Most car insurance companies cover driving a rental car with the same coverage as your own car on your policy.

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Credit card

Your credit card may offer some insurance for a rental car if you pay for it with your card.

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Travel insurance

This policy may offer rental car or personal contents coverage to protect belongings.

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Home or renters insurance

These policies typically cover your luggage and anything in your car.

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Health insurance

Your health insurance should pay to treat accident injuries unless you’re driving abroad.

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How credit cards cover rental cars

If you pay for a car rental with your credit card, you may get basic protection like theft, collision or towing — and sometimes medical bills or personal property protection. However, credit card coverage may cover a short timeframe or cap coverage at $50,000.

Also, ask your credit card company if its insurance is primary or secondary. Secondary benefits mean that you’ll file a claim on other policies before filing with your credit card. Many cards like Visa and Mastercard offer secondary benefits or only act as primary coverage when you don’t have other insurance.

If you’re traveling abroad, some countries require a collision waiver. Check with your credit card and rental car companies for what’s required at your destination.

How travel insurance covers rentals

Your trip insurance may include a rental car damage waiver, bypassing the need to buy this protection. The waiver releases you from paying for accident damage to the rental car.

You also can get trip interruption or cancellation. If an emergency leads you to cancel or cut your trip short, the policy may pay for nonrefundable rental car costs. 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 or personal injury protection 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 belongings, insuring your personal items even when they’re traveling with you. Your luggage, electronics and other items in the rental are covered up to your policy’s limits.

However, some policies lower the limits when the items aren’t at home, such as 10% of your personal belongings coverage. In this case, $50,000 in personal belongings coverage may be lowered to $5,000 for belongings traveling with you.

Do I need to buy rental car insurance?

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, buying extra rental insurance means that you won’t mess with your personal policy if an accident happens. A separate policy could give you extra peace of mind and fewer out-of-pocket costs than car insurance, especially if the rental car policy offers a low or no deductible.

Rental car insurance vs. rental reimbursement coverage

Rental reimbursement coverage is different from rental car insurance — it’s an optional car insurance coverage that pays for the cost of a rental car after a car accident.

Rental car insurance covers any damage that you cause while driving a rental car.

When personal car insurance might not be enough

Consider the extra rental coverage if you’re not covered by your personal insurance policy. You can call your insurance company to understand how you’re covered. You might need extra rental car insurance when you:

  • Own a low-value car. If you total a brand new rental car valued higher than your car, your coverage might not pay for all of the damage.
  • Have liability-only insurance. You might buy the rental company’s collision damage waiver if you don’t have collision coverage on your policy.
  • Keep high deductibles. If your policy’s deductible is at or over $1,000, consider whether you can handle that out-of-pocket expense.
  • Have commercial car insurance or are renting for business. A personal auto policy won’t extend to business car rentals, and vice versa.
  • Let someone else drive the rental. Since you tell the rental company who’s driving, drivers without personal car insurance will need separate coverage.
  • Are renting luxury. If you’re renting a luxury car like a Maserati or Lamborghini, check with your insurer before turning down the rental company’s coverage.
  • Are driving abroad. Many car insurance policies won’t cover driving to Canada, Mexico or anywhere else abroad.
  • Are renting an RV or motorcycle. A few companies extend your coverage to motorcycle rentals, but not everyone insures RV rentals.

Types of rental car insurance coverage

You’ll come across four types of rental car coverage. For pricing, we looked at sample quotes from multiple rental car companies.

Personal accident insurance

Personal accident insurance covers you and your passengers 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: $7 per day
  • Medical coverage: $3,500
  • Ambulance coverage: $150
  • Death benefit: $175,000 for renter; $17,500 for passenger

Collision damage waiver

A collision damage waiver releases you from responsibility for rental car damage, helping you pay less or nothing if the rental is stolen or damaged. The 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: $13 per day
  • Coverage: $1 million

Companies that offer rental car insurance

Aside from free coverage on other policies you have, you can buy rental car insurance from the rental car company. The representative at the counter will ask whether you’d like insurance. Understand what your personal insurance covers beforehand, so you can make a smart decision.

To help you compare, we looked at the coverage and costs from a few companies that provide rental car insurance.

CompanyCollision damageExtra coveragePolicy cost
Allianz$40,000
  • No deductible
  • 24-hour hotline
From $9/day
Chase Sapphire Preferred credit cardUp to actual cash value of the rental for theft and collisions
  • Primary collision coverage
  • $20,000 for trip cancellations or interruptions
$95 annual card fee
EnterpriseVaries by rental and location
  • $1 million in supplemental liability
  • Personal accident
  • Roadside assistance
Varies by rental and location

  • $5 to $13/day for accidental death
  • $11 to $18/day for supplemental liability
Rental Cover$35,000
  • Roadside service
  • Lost rental company income
  • No deductible
  • Covers rental cars, car shares or international driving
From $10/day

Dealing with a rental car accident

After a rental car accident, make sure everyone’s okay and get people and your car to a safe place. Then, exchange info with other drivers to start the process of filing a car insurance claim.

As soon as possible, file a claim with your primary car insurance company, submitting any evidence for the accident. Your insurance adjuster will help you with the next steps for settling the claim with the rental car company.

Dive deeper into dealing with a rental car accident

How to protect yourself from a claim

Car rental companies typically don’t make damage claims against customers. But if it does happen, you could be on the hook for hundreds or even thousands of dollars without insurance coverage.

Take steps to protect yourself from a damage claim.

  • Inspect the rental car with an employee and write down any existing damage, no matter how minor.
  • Take time-stamped photos of any damage before leaving the lot.
  • Take time-stamped pictures again once you drop the car off for an accurate comparison.

What should I do if a rental company files a claim against me?

Whether or not you documented the car’s existing damage, you can put heat on the rental company to prove that you damaged the car.

  • Request time-stamped photos of the car immediately before you rented it and after you turned it in.
  • Ask if the company rented out the car again before sending the claim letter.

Bottom line

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.

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