Does car insurance cover rental cars?
When you rent a car, the rental company will likely ask if you want to purchase their insurance to cover your rental. But do you need that insurance to rent a car? Or does your car insurance already cover your rental car?
Should I get insurance on a rental car?
This can be a confusing situation, and the car rental agency may try to persuade you to purchase their insurance policy. The truth is, your own auto policy may already cover your rental.
Buying supplemental insurance from the rental company— can add approximately $15 to $30 per day to the cost of the rental.1 However, if you already have an insurance policy on your own car, you may be covered in your rental vehicle.
How do I know if my personal auto insurance covers a rental car?
Before you sign any paperwork at the rental office, call your auto insurance agent and ask if your car insurance covers your rental car. If you don’t have liability, comprehensive and collision coverage on your own car, then your insurance likely will not cover your rental car if you get into a collision or damage the rented vehicle.2
Another important thing to keep in mind when figuring out whether or not your auto insurance covers your car rental is the purpose of the trip. If your personal auto insurance doesn't cover business use, you may not be covered by your policy if you rent a car for a business trip.
Always double-check your personal auto insurance policy to make sure that you have sufficient coverage before accepting or declining insurance at the rental office.
What does rental car insurance cover?
Any coverage that you have normally through your auto insurance policy will typically transfer to the car that you’re renting. The following are some kinds of coverage your rental company will offer you in lieu of your standard insurance.
Liability coverage
Liability coverage protects you if your rental vehicle is in an accident that causes bodily harm to other individuals or damage to property. Your liability insurance from your auto policy will most likely cover this already.
Collision/loss damage waiver
A collision/loss damage waiver relieves you of financial responsibility for damages caused to your rental vehicle. Your collision and comprehensive coverage will usually cover this already, however a more expensive rental car may require you to purchase additional coverage to ensure the cash value of the vehicle is covered.
Personal effects coverage
Personal effects coverage protects you if any of your belongings are stolen from your rental vehicle, however renters or homeowners insurance typically covers you in these cases.
Personal accident coverage
Personal accident coverage protects you from any medical fees caused by an accident. If you have personal injury protection through your auto insurance, you can decline this additional coverage from the rental company.3
Credit cards and rental insurance coverage
In addition to coverage from your auto insurance policy, your credit card company might provide insurance coverage if you use its card to pay for the rental. However, it's important to check with the company before you rent to understand exactly what kind of coverage you may or may not have. In some cases, it might only be collision insurance, which can help pay for any property damage but not cover any costs arising from injuries that occurred in the collision.4
Also, be aware that different credit card companies have different rules and restrictions when it comes to what they cover. Certain models such as sports cars or exotic vehicles are often excluded, and what's covered can vary from one credit card provider to the next. Some don't cover incidents that take place on dirt or gravel roads, while other cards don’t cover damage to wheels and rims.5
Knowing whether or not your auto insurance covers your rental car isn't a simple yes-or-no answer. Because there are many different factors to consider, always contact your auto insurance agent before going on a trip. Review your policy and determine what you might need.