In the U.S., you are not legally required to buy add-ons at the counter to drive a rental car. The rental vehicle itself carries at least the state’s minimum third‑party liability through the rental company’s policy or self‑insurance, per state financial‑responsibility laws and consumer guidance (New York DFS; Texas DOI). Minimums are rising in some states—California increased to 30/60/15 on Jan. 1, 2025 (AB 331) and New Jersey has scheduled higher minimums effective 2026 (NJ DOBI). If you rent frequently, decide how you’ll cover damage or theft of the rental car and agency fees: the rental company’s LDW/CDW (about $10–$30+ per day), a third‑party policy (e.g., Allianz ~$11/day), or eligible credit card benefits. Typical add‑ons can add $30–$60 per day or ~$210–$420 over a 7‑day rental (NerdWallet; Bankrate; Forbes Advisor).
What is Covered by Rental Company Policy Options
Whether rental protections are “worth it” depends on what you already have, but the price impact is concrete. In many markets, accepting LDW/CDW, supplemental liability, and PAI/PEC plus roadside adds roughly $30–$60 per day, or about $210–$420 for a week (NerdWallet; Bankrate; Forbes Advisor). Remember that LDW/CDW is a contractual waiver, not insurance, and is optional under state rules (NY DFS).
Loss-damage waiver
LDW/CDW typically covers damage to or theft of the rental car and often includes “loss of use” and towing when terms are met. Typical cost is about $10–$30+ per day, higher for premium vehicles or high‑cost locations (NerdWallet; Bankrate; Forbes Advisor). It’s optional and separate from legally required liability (NY DFS).
Liability coverage
Supplemental/Additional Liability (SLI/ALI) raises third‑party liability limits well above state minimums—commonly to $300,000–$1,000,000—and typically costs about $8–$17 per day (Bankrate; NerdWallet; Forbes Advisor). The rental vehicle already carries the state‑required minimum liability via the rental company’s policy or self‑insurance; SLI is an optional top‑up (NY DFS).
Personal accident insurance
PAI pays defined accident/medical benefits for occupants during the rental. Expect about $1–$5 per day (Bankrate; NerdWallet). It is not a substitute for health insurance; in some states, auto MedPay/PIP can also apply (Insurance Information Institute).
Personal property coverage
PEC reimburses theft of personal belongings from the rental. It’s often sold with PAI as a bundle for roughly $3–$7 per day, or ~$1–$5 per day if purchased separately (Forbes Advisor; Bankrate). Homeowners/renters insurance may also cover these losses subject to deductibles (III).
What is Covered by Your Primary Insurance
Your personal auto policy often extends to rentals for personal use in the U.S., but the legally required liability for the rental vehicle is provided by the rental company’s coverage at state minimums. In no‑fault/PIP states, required benefits are provided under the policy on the rental vehicle; add‑ons remain optional (NY DFS; III). Here’s how that interacts with common rental options and when extra protection can still make sense.
Loss-damage waiver
If you only carry state‑minimum liability, you have no coverage for damage to the rental car. If you carry collision/comprehensive, your policy may cover the rental, but you’ll owe your deductible and a claim can affect your premium. A waiver or primary third‑party policy can help you avoid filing on your own insurance (III). Alternatives include Allianz’s ~$11/day primary damage coverage or certain credit cards with primary CDW.
Liability coverage
State‑minimum liability can be inadequate for serious crashes. If your personal limits are low, consider increasing them on your policy or adding SLI from the rental company, which commonly boosts limits to $300,000–$1,000,000 (Bankrate; Forbes Advisor).
Personal accident insurance
Medical costs after a rental accident are usually handled by health insurance and, where applicable, auto MedPay or PIP. If you lack those benefits or want additional occupant coverage, PAI is an option (III).
Personal property coverage
Stolen or damaged personal items are typically covered under homeowners or renters policies (subject to deductible/limits). Rental PEC can offer trip‑specific reimbursement for smaller limits (III).
Average Cost for Each Available Rental Insurance Option
Plan for the following typical daily ranges in 2025 U.S. markets: LDW/CDW about $10–$30+, SLI roughly $8–$17, PAI about $1–$5, PEC about $1–$5 (often bundled as PAI/PEC for ~$3–$7), and roadside assistance ~$4–$7. Together, these can add $30–$60/day or ~$210–$420 for a week before taxes/fees (NerdWallet; Bankrate; Forbes Advisor). Here are some price ranges to get an idea of what to expect at the rental counter.
- Collision Damage Waiver (CDW): about $10 to $30+ per day (varies by location and type of vehicle)
- Supplemental Liability Protection (SLP): about $8 to $17 per day
- Personal Accident Insurance (PAI): about $1 to $5 per day
- Personal Effects Coverage (PEC): about $1 to $5 per day (often bundled with PAI as PAI/PEC for ~$3 to $7 per day)
Rental Car Insurance Coverage for International Travel
Your personal auto insurance or credit card benefit may not fully apply abroad. Across the EU/EEA and UK, third‑party liability is legally mandatory and typically embedded in rentals (European Commission), while damage/theft cover (CDW/TP) often carries a high deductible (“excess”) that you can reduce to near‑zero with a paid add‑on; excesses of roughly €1,000–€3,000+ are common in many markets (Enterprise UK; III). In Mexico and parts of Latin America, liability requirements are stringent and SLI is commonly sold; card benefits typically cover vehicle damage/theft only, not liability (III; U.S. Department of State).
Before departure, verify what the base rate includes (TPL? CDW/TP? excess), cross‑border restrictions, and whether your card/travel policy is valid in your destination. Credit card CDW benefits usually require paying with the card and declining the agency’s waiver, and they carry rental‑length caps (often 15–31 days), vehicle‑type exclusions, and geographic limits (Visa; American Express). Some countries require police reports for claims—know local rules and keep documentation (U.S. Department of State).
Buying Rental Car Insurance With Your Personal Credit Card
Many cards include an Auto Rental CDW that covers damage or theft of the rental vehicle (not liability). Several premium cards provide primary coverage in the U.S. and abroad when you pay with the card and decline the agency’s CDW—examples include Chase Sapphire Reserve, Chase Sapphire Preferred, and Capital One Venture X (TPG guide). Typical limits include rental duration caps (often 15–31 days) and exclusions for certain countries and vehicle classes; loss‑of‑use and towing may be covered when properly documented (Visa benefits; Mastercard World Elite).
American Express offers an optional upgrade—Premium Car Rental Protection—which provides primary damage/theft coverage for a flat fee per rental period (typically $12.25–$24.95, by state/option). Enrollment is required; liability to others is not included. Discover does not provide rental car insurance benefits (Discover). Always confirm terms in your card’s current Guide to Benefits before relying on coverage (TPG).
When Should You Get Rental Car Insurance?
Buying extra protection can be cost‑effective in specific situations, based on current pricing and how claims affect personal policies.
- You are uninsured or have the bare minimum coverage: If you don’t carry collision/comprehensive, you’re exposed to the rental’s repair bill, “loss of use,” and fees. Consider LDW/CDW or a primary third‑party policy (e.g., Allianz ~$11/day). Liability beyond state minimums may require SLI (III).
- You travel for business: Personal auto policies may exclude business use. If your employer’s coverage doesn’t apply, consider purchasing coverage for the trip or using a card with primary CDW (III; TPG).
- You are driving internationally: Local third‑party liability is often included in the base rental in the EU/UK, but CDW/TP usually carries a high excess unless you buy “zero‑excess” options. Card benefits typically cover vehicle damage/theft only and have country and rental‑length exclusions—verify before travel (European Commission; III; U.S. Department of State).
- You want to protect your auto insurance rates from a surge: Filing an at‑fault claim on your personal policy raises premiums by roughly 40%–60% on average, commonly for about three years; consider a primary waiver/third‑party policy or a card with primary CDW to avoid a personal claim (The Zebra 2025; Bankrate 2025).
Stand-Alone Rental Car Insurance
Beyond counter add‑ons, standalone providers sell primary damage/theft protection (U.S.) or excess‑reimbursement policies (UK/EU) that can cost less than LDW/CDW. These products typically exclude third‑party liability, so you may still need SLI or rely on a personal policy (III). Notable options include:
- Allianz global assistance – Best coverage abroad. Also offers a U.S. Rental Car Damage Protector (~$11/day) with up to $75,000 in primary damage/theft coverage, no deductible, and loss‑of‑use coverage; liability not included.
- Bonzah – Easiest cancellation policy. Verify eligible states, vehicle classes, and rental‑length caps; most third‑party policies exclude liability (III).
- Insure My Rental Car – Best online quote tool. Often operates as excess‑reimbursement outside the U.S.; check country eligibility, vehicle exclusions and limits (III).
- Rental Cover – Most compatible with rental companies. Sells primary damage/theft cover that commonly includes glass, tyres/tires, roof and underbody; no deductible; confirm territory and vehicle eligibility (RentalCover.com).
- Sure – Best mobile app. App‑based purchase/claims for rental damage coverage; terms vary and liability is typically excluded; verify rental‑length and vehicle class limits (III).
