Do You Need Insurance to Rent a Car?

Lucy Lazarony
May 21, 2020

Trying out a new set of wheels for a vacation or business trip? Renting a car can be a fun experience, but you will also need to think about auto insurance and how you can protect yourself from accidents or damages while driving in your rental car. Do I need insurance to rent a car? No, you don’t need to own a car or have an auto policy of your own to rent a car. The rental car companies will be eager to sell you their own car insurance protections. Next question: When renting a car do I need to buy insurance? Yes, it is a wise move to do so unless you are already covered with your own auto policy.

Does Car Insurance Cover a Car Rental?

If you carry comprehensive, collision and liability coverage on your own car it will most likely extend to the rental car you are renting. Not sure if your auto insurance covers rental cars as well? Reach out to your car insurance company and ask. You’ll want to double-check that your car’s coverage applies to rental cars before an upcoming family vacation or business trip.

At the rental car counter, they have their own insurance to sell. And you’ll be able to turn down this coverage with confidence, knowing that your car’s comprehensive, collision and liability coverages apply to rental cars.

Don’t forget about your auto policy’s deductible. A deductible is the amount you need to pay before your auto insurance company begins to pay for damages to your car or losses.

So, as great as it is to pass on your car’s comprehensive, collision and liability coverages to a rental car, your deductible still needs to be paid if you do file a claim for an accident. You always need to pay that deductible before your auto insurance coverage begins to pay for any damages or losses that may occur with the rental vehicle or your own car.

At the rental car counter they sell coverage called loss damage waiver, sometimes called collision damage waiver. These waivers cover the same situations as an auto policy’s comprehensive and collision insurance. So you don’t need to purchase this coverage from the rental car company if you already have comprehensive and collision coverage on your car. If you do not, it’s not a bad idea to buy a waiver.

Do I Need to Add Insurance When Renting a Car?

If you have a low liability limit on your car insurance you may wish to increase it for the duration of your business trip or family vacation. The extra coverage will offer peace of mind as you travel. This will also be much cheaper than buying insurance from the rental company. Remember, however, that if you do not have collision and comprehensive coverages on your personal policy, you will not be covered in your rental car unless you add it to your existing policy or buy the waiver. Get rates for full coverage auto insurance.

Can I Use My Liability Coverage to Rent a Car?

Your liability insurance would apply up to your policy’s liability limit, including damages done by you to other cars and property with the rental car. However, your liability insurance will not pay for your rental, unless you’ve been in an accident and have specific coverage that pays for a rental car while your car is being repaired.

Does Insurance Cover Damage to a Rental Car?

Yes, your car’s comprehensive and collision coverages applies to damages made to a rental car. If you don’t have these you may consider adding it onto your policy or buying a waiver from the rental company. Again, double-check that your auto policy coverages apply to rental cars. Because if they do, you won’t need any additional insurance for your rental car.

If you or your passenger is injured in a rental car you will need to access your medical payments or personal injury protection (PIP) on your auto policy. These are optional coverages so check with your insurer to see that you have them. PIP is required by law in some states. If you don’t have either medical payments or PIP on your auto policy, you may want to consider purchasing personal accident insurance at the rental car counter.

Reasons to Purchase Insurance from a Rental Car Company

There are some good reasons to purchase insurance coverage from a rental car company. There’s no deductible to pay if you are in an accident. And if you don’t have medical payments or PIP, collision or comprehensive coverage on your auto policy, you can purchase this protection from the rental car company. How Much Is Insurance When Renting a Car?

The cost of insurance varies from rental car company to rental car company. But typically the charge is $40 a day for insurance from a car rental company. Over a week-long trip that would add up to $280. That is pretty expensive. And that is why it is a good idea to consider your other options. Does your auto policy extend to rental cars? That would be a more economical coverage than paying for additional coverage that you don’t need at the rental counter. However, you will need to pay the deductible for collision or coverage on your personal auto policy if you damage the rental car in an accident that is your fault.

Using Credit Cards for Rental Car Insurance

A third option to consider is credit cards. Many credit cards offer car rental insurance, mostly as a collision damage waiver or loss damage waiver. And they may cover towing expenses as well.

Each credit card offers a different amount of car rental insurance coverage. So reach out to each of your credit card companies to find out the best insurance deal.

You may be able to find the information on the card issuer’s website under card perks and benefits. If the information is not there, call the customer service number and ask for the card’s car rental policy. Repeat this for each card that you carry in your wallet.

The credit card with the best rental car insurance coverage is coming with you on your next trip. Use it to pay for your car rental, and voila, you’re protected by the card’s car rental insurance coverage.

Credit Cards: Primary or Secondary Rental Car Coverage?

The rental car coverage from a credit card is often secondary coverage. This means your credit card company will only cover the accident or damage fees and charges that your primary car insurance company doesn’t cover.

So if an accident or damage should happen with a rental car, you will need to file a claim with your primary insurer, your auto insurance company, and pay your deductible. And after that, your credit card’s car rental insurance can be applied, covering whatever your auto insurance company doesn’t cover.

Some credit cards offer primary coverage with car rental insurance on their credit cards. And that is another thing to ask about when researching your car rental insurance options with your credit card companies.

Choose the card with the best coverage for rental cars and take it with you on your next trip. Even secondary coverage is better than no coverage at all and it is a nice supplement to your car insurance policy.

The simplest way to be fully insured without paying too much is to have full coverage on your personal auto insurance policy. If you compare auto insurance quotes by entering your zip code below, you’ll know you’re paying the least expensive price around.

Get a Free Auto Insurance Quote Online Now.

Related Articles

Auto Insurance Triple A Towing: Is it Really the Best Option?

Triple A towing, it’s what comes to mind when we need a tow truck, even when we’re not members of the American Automobile Association (AAA).

Auto Insurance Allstate vs. Geico: How the Majors Measure Up

Drivers pay money to a car insurance company to cover accident-related damages and medical bills. Who does it better, Geico or Allstate?

Looking for Auto Insurance?

Compare rates from dozens of companies in less than 3 minutes.