Do I Need Rental Car Insurance?

Lauren Ward
Lauren Ward
Contributing Writer
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When renting a car, whether for a vacation or a business trip, you’ll be asked if you want to get rental car insurance. This type of policy is meant to protect you with rental car insurance coverage in case something happens to the vehicle while it’s under your care. In many situations, you may not need to purchase additional insurance since you likely have other financial products, such as a credit card, that already have you covered.

Are rental insurance options covered by your current insurance policy? 

If you’re wondering, “Does comprehensive insurance cover rental cars?” the answer is most likely yes. Typically, you can expect to be covered up to your policy limits if you cause an accident. What exactly is covered depends on whether you have comprehensive or liability coverage. Your liability coverage will pay for another driver’s injuries or damages, collision coverage will pay for damages to the rental car and comprehensive insurance covers theft or vandalism of the rental.

Loss-damage waiver 

  • Rental Company: Its policy relieves you of financial responsibility for a rental car that is damaged or stolen. You’re also covered for “loss of use,” when the rental car company couldn’t rent out the car because of the incident.
  • Primary insurance: Car rental damage insurance is usually covered under your own auto policy if you have both collision and comprehensive coverage.

Liability coverage

  • Rental Company: Car rental liability protection is essential in case you injure another person or damage property while driving the rental car. You may get a more extensive coverage amount with the rental company’s policy.
  • Primary insurance: You probably have liability in your auto insurance policy, but the limit might be low. 
  •  You could potentially supplement it with additional car rental liability protection.

Personal accident insurance

  • Rental Company: This helps with medical costs if you or your passengers are injured while in the rental car. In addition to medical assistance, it also covers any costs from an ambulance.
  • Primary insurance: You’re more likely to be covered by your health insurance than your auto insurance. Depending on your plan’s deductible, you may prefer to add on coverage from the rental company.

Personal property coverage

  • Rental Company: With this add-on policy, you’ll be covered if any of your personal property is stolen from the rental car while using it. This can be particularly useful if you’re on vacation in tourist-heavy areas that could easily be targeted for thefts.
  • Primary insurance: Check either your homeowners’ insurance policy or your renters’ insurance policy. In most cases, it should cover your belongings regardless of where you actually are. 

Average cost for each available rental insurance option 

Many factors impact how much you’ll spend on rental car insurance, such as your existing coverage, where you are and the type of vehicle you’re renting. Here aresome price ranges to get an idea of what to expect at the rental counter.

  • Collision Damage Waiver (CDW): Varies by location and type of vehicle
  • Supplemental Liability Protection (SLP): $11.19 to $18 per day
  • Personal Accident Insurance (PAI): $5.13 to $13 per day
  • Personal Effects Coverage (PEC): $5.13 to $13 per day

Rental car insurance coverage for international travel 

Your personal auto insurance or credit card insurance might not apply if you’re traveling abroad. When preparing for an international trip, call your auto insurance company and credit card to find out if your rental car is still covered. If you bought international travel insurance, it could include your rental car.

It’s always a good idea to check this before standing at a rental car counter in a foreign country. If the decision to rent a car was impulsive, you might be better off buying the international rental company’s rental car insurance just to be safe.

Buying rental car insurance with your personal credit card 

Credit cards offer secondary coverage on rental cars, stepping in to fill the gaps after you’ve filed a claim with your auto insurer. They’ll help pay towing fees, your auto insurance deductible and some rental car agency fees. You may be limited to where you can travel and qualify for these benefits. For example, you may not be covered when renting a car in a foreign country.

The best credit cards offer rental car perks automatically. If you know you’re going to be renting a car during your travels, call your credit card company in advance to gain a full understanding of what they offer. It will save you time compared to figuring it out while in line at the car rental counter.

Stand-alone rental car insurance

When does it make sense to buy rental car insurance from the agency? 

If you’re traveling for business, it may be a smart idea to purchase rental car insurance because your own policies may not cover you. Plus, your employer will likely reimburse you for your rental car expenses. Otherwise, do a quick audit of your existing coverage before adding anything new. Then, research prices and coverage in advance and compare your options. If you’re prone to worrying, getting insurance from the rental company could give you peace of mind while you’re on the road.

FAQ 

Do I need to get rental car insurance?

It depends on your existing coverage from other insurance policies. Before you travel, check your auto insurance policy, your credit card perks and your homeowners’ or renters’ insurance policy. Together, they may give you fairly comprehensive rental car coverage.

Can you rent a car without insurance?

Your rental car already has some degree of insurance, even without your own policies coming into effect. However, you’re responsible for any damage you inflict upon the vehicle, so it is wise to make sure you have some type of coverage in place.

How do you file an insurance claim on a rental car? 

You’ll need to contact both the rental car company and your own insurance company if you get into an accident or have any other type of damage. Look on your rental contract for details on how to proceed and you should also be able to find an emergency phone number somewhere within the vehicle.

What type of rental car insurance should I get?

This depends on what kind of coverage you already have. Before purchasing a stand-alone policy, see what applies from your current auto insurance plan. Then check to see what gaps may be filled in by your credit card company and your homeowners or renters insurance.

Does my car insurance cover rental cars?

At a minimum, your liability coverage will most likely apply to any rental cars, but only up to the amount of your policy. If you have comprehensive and collision coverage, they will likely add to the situations in which you’ll be protected. 

Is it necessary to buy car rental insurance?

It’s not necessary, but it is recommended. You’ll be financially liable to damage caused to the vehicle while it’s under your care. Not only that, but you may also have liability issues to any individuals or property that gets hurt by the car you are renting.

About the Authors

Lauren Ward

Lauren Ward Contributing Writer

Lauren Ward is a personal finance writer who regularly covers consumer insurance products. Her work has appeared in a variety of online publications, including Bankrate and The Simple Dollar. She graduated from Georgetown University with a BA in Japanese.