Do I Need Rental Car Insurance?

Fran Majidi
March 14, 2019

You’ve made it through winter and are already looking to your spring or summer vacation. As always, you dread the airport, baggage claim and the car rental company. You never are sure if you need to buy the additional insurance they offer or if your personal auto insurance will apply. Or is it the credit card that supplies the insurance? So confusing! Yes, you have first-world problems (and thank God for them). But, what if you get into a car accident? Isn’t there car rental insurance or rental car insurance that you can buy for your existing policy before the trip?

We know how to get you car insurance at the best rates, and our agents are experts in rental car insurance too. But first, Let us guide you through all you need to know to make this year’s amazing getaway a little less stressful on you, your loved ones and your wallet.

Do I Need Rental Car Insurance?

When you show up at the rental car company, you get the car you reserved. You’re then given the option of buying insurance, usually somewhere between $15 and $30 per day, which is a pretty expensive cost. But do you really need this insurance? Well, for one thing, what the rental car company offers you is not insurance. It’s a damage waiver. The only time you’re better off buying your protection from the rental car company is when you don’t have any car insurance at all and your credit card offers no protection. We’ll show you how to get covered at the cheapest rates and with the best protection below.

Will My Existing Car Insurance Cover a Rental Car?

It’s always best to call your agent and ask exactly what kind of coverage will apply to a rental car before you rent one. In many cases, if you have a car and auto insurance on that car in your name, you will be able to apply your insurance to cover damages if you’re in an accident in the rental car. If you only have liability insurance and no collision coverage, you’ll need to buy additional collision coverage in order to get the protection. If you have collision coverage on your car, you will have to pay the deductible on your insurance first before it begins to cover any damages to the rental car. If the rental car is worth more than your policy limits, you’ll need to buy extra coverage or else you’ll be paying out of pocket. In some cases, however, an insurer will only cover a rental car if it’s being used as a substitute while your car is out of service or in the shop. Again, ask your agent if you have rental car coverage for pleasure driving before assuming you’re covered for your vacation.

Does a Credit Card Provide Rental Car Coverage?

It’s important to call your credit card company if you plan to use your card to rent a car. Some  credit card networks provide insurance coverage at no cost as long as you use the card for the rental. Usually, this coverage is not very comprehensive so it should be used only to cover what your primary auto insurance doesn’t cover. If you do not have a car or car insurance and this is your only form of insurance for the rental car, you may have to pay out of pocket for damages if you’re involved in a car accident. Just to be safe, it is not a bad idea to consider the damage waiver insurance sold through the rental car company but a much more economical alternative is to buy a standalone rental car insurance policy from your car insurance agent. See more on this below.

Buying a Rental Car Insurance Policy

If you want to be fully covered without buying a damage waiver from the rental car company, you can buy a rental car insurance policy directly from an insurance company, possibly even the carrier with whom you’re insured. This standalone policy is always cheaper (nearly half the price) compared with the damage waiver that they call insurance at the rental car company. Just make sure to understand the coverage terms.

Things to Do When Renting a Car:

  • Discounts & Rewards Programs: Check your membership programs for discounts on renting a car. AARP, AAA, some frequent flier programs and some sports groups offer rental car discounts. Visit your organizations’ websites or call them to ask about travel and rental discounts. You won’t know if your affiliates offer discounts unless you check.

  • The Walkaround: Before you’ sign the rental car agreement, the rental car company will do an inspection of the car they are lending you. This walkaround inspection is done to check for dents and scratches, rips and burns. If you return the car with these sorts of damages (or worse), the walkaround inspection will be used to verify that the damages occurred while the car was in your possession. Make sure to be alert during the walkaround. Point out problem spots if the agent doesn’t take notice. Always check inside the car too, for burns, rips and stains. Make sure to keep the copy of the inspection report for up to year after the rental, in case the rental car company comes to collect on damages.

  • The Final Inspection: It may be frustrating that you are not present when the car rental company checks over the car you’re returning, but there is one thing you can do to protect yourself: Conduct your own slow and thorough walkaround video using your phone. There are so many disputes after cars are turned in. There’s very little you can do to protect yourself against such accusations, aside from time-stamped videos and photographs.

  • International Borders: Your car insurance in the U.S won’t apply across international borders. Your credit card may cover you somewhat, but you’ll likely need to buy your rental car insurance from the rental company in the country you’re visiting. Call your credit card company first and ask about the limits on your coverage when you rent a car across the border.

  • Avoid the Rental Company at the Airport: First, the lines are long because far too many other people also want to rent a car. Painfully, rates are usually higher too due to the convenience of being located inside the airport. Do a little research before the trip to see what your options are. When crunching the numbers, make sure to get the figures for the tacked on fees at the airport rental. You may save a lot of money Ubering to the airport after you drop off a car at a rental place a few minutes away..

  • Car Insurance: All year round you should be paying the lowest rates for solid auto insurance. We want to help, so visit us here for a quote.

    Get a Free Auto Insurance Quote Online Now.

    Related Articles

    Auto Insurance Do You Need Car Insurance?

    Most U.S. states require proof of insurance for drivers to operate a car. However, each state comes with its own set of rules.

    Auto Insurance SR22 Insurance: Texas Laws and Requirements

    SR-22 insurance policies give Texans with not-so-perfect driving records a second chance to get back on the state’s highways.

    Looking for Auto Insurance?

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