Does My Car Insurance Cover Rental Cars?

Do I Need Insurance to Rent a Car?

You're typically required to have some type of car insurance when renting a vehicle. In the U.S. and Canada, some of your options include coverage through the car rental agency, your personal car insurance policy or your credit card, if it offers a collision damage waiver.

Personal car insurance typically doesn't cover rental vehicles outside of those two countries. If you're traveling elsewhere, your destination may have its own set of insurance requirements. You can find specific requirements by contacting the U.S. embassy in the country you're visiting ahead of your trip.

Learn more: What Does Car Insurance Cover?

Does My Auto Insurance Cover Rental Cars?

Whether your auto insurance covers rental cars depends on where you're renting. Personal auto insurance policies typically extend to rental cars in the U.S. and Canada. Any coverages, policy limits and deductibles you chose for your personal policy apply to the rental vehicle as well. If you carry collision and comprehensive coverage on your personal car, for instance, you'll have it on the rental, too.

Using your personal auto insurance could be a good option if you want to save money. Coverage from a car rental agency may cost anywhere from $9 to $42 per day or more, which you can avoid by using an existing personal policy. However, the strategy could backfire if you need to file a claim for the rental car using your personal coverage, since the claim could drive up your premiums.

Using personal car insurance won't be an option, though, if you're renting overseas. You'll need to get coverage elsewhere, such as the car rental agency or your credit card.

Learn more: What Are the Types of Car Insurance?

Should I Get Rental Car Insurance?

Car rental insurance can get expensive, so it's important to consider whether it's necessary before buying it. Here are some situations where it might make sense to buy the rental agency's insurance:

• You want to rent a more expensive vehicle for the experience
• Your personal policy has high deductibles
• You don't carry a lot of liability coverage
• You want to avoid claims on your personal insurance policy
• Your personal policy doesn't include collision and comprehensive coverage
• You're planning to travel outside of the U.S. and Canada
• You don't have a credit card that can cover some of the differences

Types of Rental Car Insurance

Car rental agencies provide a few different types of coverage that you can purchase for your rental vehicle:

• Loss or collision damage waiver waives your responsibility to pay for damage to the vehicle, including theft and vandalism.
• Liability coverage provides protection in the event that you cause personal injury or property damage while driving the rental vehicle.
• Personal effects coverage pays for personal items stolen from your rental vehicle.
• Personal accident insurance covers any personal injuries you and other people in your rental car sustain while driving the vehicle.

Does My Credit Card Cover Rental Car Insurance?

Many credit cards offer rental car coverage as a free benefit to cardholders. To see if your credit card is eligible, check the card's terms and conditions, or contact your card issuer's customer service department. They should verify whether you'll be covered depending on the policy and your plans.

While it's commonly referred to as insurance, the card benefit actually comes in the form of a collision damage waiver or loss damage waiver. These waivers release you from some or all of the financial responsibility if your rental car is damaged or stolen.

The coverage is usually secondary, meaning the credit card will cover some of the expenses not covered by your primary car insurance policy. In particular, your credit card may cover the cost of your collision or comprehensive deductible, as well as the claim amount that exceeds your personal policy's coverage limits.

Keep in mind, however, that credit card coverage does not extend to liability, personal injury or personal effects. So, if you want those covered, you'll need to rely on your personal policy's limits or buy the car rental agency's insurance.

Learn more: Liability vs. Full Coverage Car Insurance: Which Is Better?

Frequently Asked Questions

The Bottom Line

Whether you decide to rely on your personal auto insurance policy, your credit card's coverage or the rental agency's insurance, it's important to think about the potential risks of skipping the agency's coverage and weigh them against the cost of what the agency is charging.

If the trip is short and the rental would be fully covered by your personal policy, you may have no issue declining the agency's coverage. But if it's a longer trip or you're concerned about relying on your personal policy or credit card for other reasons, paying that extra amount could provide you with some peace of mind.

Whatever you do, take your time to figure out which path you plan to take before you get to the rental counter to avoid unnecessary stress.

If you want to maximize your savings on your personal auto insurance policy, you can use Experian's auto insurance comparison tool to compare quotes from top providers to ensure you get the best rate.