Do I Need Rental Car Insurance?

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Written by Paige Cerulli Edited by Quiana Darden Reviewed by Amanda Clear

Updated December 20, 2022

When renting a car, the service agent will ask you multiple questions, including whether you want to purchase rental car insurance. It can take time to decide, especially when you need more information about whether rental car insurance is necessary. Whether you’re planning to rent a car or might need a rental one day, the more you know about how insuring your rental car works, the better you’ll be able to decide which option is right for you. 

Key Takeaways:

• When you rent a car, your personal auto insurance policy will usually cover the vehicle
• You may need to purchase additional rental car insurance if your personal policy doesn’t provide enough protection
• Buying rental car insurance can be a good idea in several situations, like if you have low liability maximums or want to avoid making a claim on your personal policy

What is Rental Car Insurance?

Rental car insurance is the type of coverage that an agency, like Hertz or Enterprise, offers you when renting their vehicle. While the specific insurance will vary depending on the agency, it often consists of several different coverage types: 

• Liability: Liability coverage helps to pay for any damages or injuries others incur when you’re in an accident.
• Loss/collision damage waiver: A loss-damage waiver exempts you from being responsible for any damage occurring while you have the rental. That damage can include vandalism and vehicle theft. 
• Personal injury insurance: Personal accident coverage helps pay for any injuries and related medical bills that occur to you or your passengers while driving the rental car. 
• Personal effects coverage: Personal effects coverage helps pay the replacement cost of any personal items stolen from your rental car. 

Many personal auto insurance policies will also cover rental cars. Your insurance may already offer you this protection, depending on your policy. You can check your policy details to see whether it’s included or if you can add this coverage to your plan. 

Do You Need Insurance to Rent a Car?

When you rent a car your personal auto policy will typically extend to the rental if your personal auto policy has full coverage including liability, property damage, comprehensive, and collision) on at least one vehicle on the policy.

Without coverage from your personal policy, you’ll need coverage from the rental car company.

When you rent a car but already have car insurance, a rental company will generally offer to add coverages like tire damage or collision. 

When is Rental Car Insurance a Good Idea?

In certain situations, investing in rental car insurance can be a good idea. 

You Don’t Have Your Own Car Insurance

You may not typically carry car insurance if you don’t own your own vehicle or live in a state like Virginia or New Hampshire, where insurance isn’t required. If you don’t have your own car insurance policy, you’ll need to buy rental car insurance to ensure the vehicle is protected. Insurance will also shield you from financial responsibility if you are in an accident. 

Depending on your situation and your plans for vehicle ownership and driving in the future, it might make sense to buy your own car insurance policy. This is particularly true if you are just renting a car until you can purchase one. If you buy car insurance, shopping around and comparing quotes can help you find the best policy at a reasonable price. 

Compare.com makes this easy. With our auto insurance comparison tool, you just fill out a single quote request form, which takes about five minutes. We’ll look at over 65 insurance companies’ prices and present you with the most affordable options to quickly find the best deal.  

You Don’t Carry Comprehensive or Collision Coverage

You might have minimal coverage on your vehicle, which is fine depending on how much risk you’re comfortable taking on in your daily driving. But if you have minimal coverage without a comprehensive or collision policy, you won’t have much protection for your rental vehicle. The insurance company will require you purchase their insurance if your personal auto insurance policy doesn’t have comprehensive and collision coverage on at least one of the vehicles. Otherwise, you won’t be able to take the car off the lot. Part of the coverage you’ll need is a loss-damage waiver that protects you from being financially responsible for any physical damage your rental car might sustain. 

You Have Low Liability Coverage Maximums

While your car insurance policy needs to meet your state minimum requirement for liability coverage, many state requirements are relatively low. You could still be financially responsible for expenses resulting from an at-fault accident with a low liability maximum. Adding rental insurance offers extra protection. 

You’re in an Area Your Own Car Insurance Won’t Cover

When you travel overseas, your car insurance may not offer coverage in your location. In this case, you will need to buy rental car insurance. Buying insurance directly from the rental car company may be the simplest solution in this case.

You Want to Avoid Claims on Your Personal Car Insurance

Taking out rental insurance can keep you from making a claim on your personal auto insurance policy because of an accident that occurs with the rental vehicle. Filing a claim could lead to rate increases or even a higher deductible for your own car insurance policy. With rental insurance, you would file a claim on that rental policy rather than on your personal auto insurance policy. This can help to prevent you from facing rate increases. 

You Have High Deductibles on Your Personal Auto Insurance

Opting for an insurance policy with a high deductible can keep your monthly payments down. Still, it also means you’ll be responsible for paying that larger deductible if you ever have to file a claim. Rental auto insurance policies tend to have very low or no deductibles. That means if you needed to file a claim, you could pay much less with your rental insurance than if you relied on your personal auto policy. 

Does Your Personal Car Insurance Cover a Rental Car?

In most cases, your auto insurance will cover rental cars, and you will have the same policy limits and deductibles on your rental car. Liability coverage will apply to your rental. If you have comprehensive and collision coverage, those policies will also help pay for any physical damage your rental car might incur. 

When you have a homeowner’s, renter’s, or condo insurance policy, these policies will often cover the cost of personal items stolen from your rental car. This is typically subject to your property insurance policy’s deductible. It’s important to carefully review your policy documents ahead of time to ensure that this is true. 

Alternatively, call your insurance company to confirm. If your policies don’t cover this expense, then you may be able to add on just personal effects coverage from the rental company, saving money over the cost of fully insuring the vehicle through them. 

It’s always a good idea to call your auto insurance company before renting a vehicle to confirm that you will be covered when driving it. During the call, you can ask any questions about coverage limits. This may be an excellent time to increase low insurance limits, so you have additional coverage. This is particularly important if you’re driving a rental vehicle with a higher value than your personal car. Increasing your limits ahead of time can help ensure you aren’t financially responsible for the difference between your coverage limits and the car’s value if you’re in an accident and the vehicle is totaled. 

Using Your Credit Card for Rental Car Insurance

Some credit cards even offer built-in rental insurance. Still, it’s essential to understand exactly how this coverage works.

In most cases, your credit card insurance coverage takes effect only after your auto insurance has paid its maximum for the claim. The secondary coverage offered by your credit card can still be helpful, though, since it can help cover the deductible of your personal auto insurance policy. 

Some cards also offer primary insurance coverage, meaning your personal auto insurance company doesn’t become involved at all when you file a claim. 

Major credit cards like Visa, American Express, and Mastercard often have some rental car insurance coverage, but the protection level will vary. Most card rental insurance coverage lasts for just 31 days, so this may not be ideal if you’re looking for a longer-term rental. You can often find information about insurance coverage through your card’s benefits guide. 

Precisely what is covered will also depend on your card. Many cards will cover damage-related claims and everyday expenses like towing. However, most don’t cover liability and injury expenses, like medical bills and lawsuits resulting from an accident. They also don’t include coverage for theft of your belongings inside the rental vehicle. Card insurance options also often exclude certain vehicles like motorcycles, luxury cars, and trucks, as well as international vehicle rentals. 

How to Tell if Your Credit Card Offers Insurance

To determine if you have this coverage, call your credit card company ahead of time. Be sure to ask whether the coverage is primary or secondary. It’s a good idea to ask about coverage limitations, deductibles, and exclusions you should be aware of when relying on this type of insurance. You should also ask about the duration of the coverage and the claims process.

How to Get a Good Deal on Rental Car Insurance

If your credit card doesn’t offer rental car insurance, or you want to look for a different policy, you can buy it directly from a car insurance company. You will usually need to decline the rental car company’s car insurance. Taking the time to shop around for rental insurance can help ensure you get the coverage you need. You may find that you can get a lower rate when buying insurance directly from a provider. 

Several companies offer rental car insurance: 

• Allianz Global Assistance
• Bonzah
• Insure My Rental Car
• Rental Cover
• Sure

As you compare the rates offered by these companies, be sure also to consider any coverage limitations and deductibles. A policy with a slightly higher rate might be a better deal than a lower-priced policy if it comes with higher limits and a lower deductible. 

FAQs About Rental Car Insurance

What is rental reimbursement coverage? 

Rental reimbursement coverage doesn’t have anything to do with protecting your rental car after an accident. Instead, this coverage is often offered as an add-on to your traditional car insurance policy. If your vehicle needs repairs because of an accident or other damage covered under your insurance policy, your insurance company will reimburse you for some or all of the cost of a rental car while your primary vehicle is in the repair shop. 

Is rental car insurance worth it? 

There’s no simple answer to this question. Instead, you will need to consider how much financial risk you are comfortable with and your personal auto insurance situation to determine if you should invest in rental insurance.

Paige Cerulli Auto Insurance Writer

Paige has written extensively on automotive topics. She frequently covers autonomous driving and electric vehicle topics, writes about car insurance and auto loans, covers car and trailer towing safety, and has written content for automotive dealerships.