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Do you need rental car insurance?

Rental car insurance costs around $50 per day, but it’s possible you won’t need it if you have your own car insurance policy or have coverage through your credit card.

Andrew Hurst

By

Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Edited byAnna Swartz

Anna Swartz

Senior Managing Editor & Auto Insurance Expert

Anna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.

Updated|9 min read

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You don’t need to have car insurance to rent a vehicle, and rental cars automatically come with a bare minimum amount of insurance. But this coverage is limited, which means it’s worth it for some drivers to get more rental car insurance.

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You probably don’t need rental car insurance if you already have a regular car insurance policy, rental vehicles are usually covered under a normal policy. You may also get a form of coverage for rentals through your credit card.

Key takeaways

  • You don’t need rental car insurance if you’re already covered by your personal auto policy or through your credit card.

  • In its basic form, rental car insurance covers the cost of any injuries or property damage if you’re in an accident while driving a rental car.

  • Damage to your rental car itself isn’t covered unless you’ve added a collision or loss damage waiver to your rental car insurance, or you have your own car insurance policy.

  • Rental car insurance is not the same as rental car reimbursement coverage, which covers the cost of a rental after your own car is damaged.

What is rental car insurance?

When you rent a car, it will usually come with just enough insurance coverage to make it legal to drive. Rental car insurance just refers to the optional coverage add-ons you can choose when you rent a vehicle — usually for an additional daily fee.

Most drivers probably don’t need every type of rental car coverage options offered at checkout, but some can be useful — like a collision loss waiver, which is usually a flat fee that ensures you won’t be charged if you damage the rental car, or extra liability coverage to cover the costs if you’re responsible for an accident while driving a rental car.

Do you need rental car insurance?

Adding rental car insurance can be expensive, but the good news is that not everyone needs it. Personal auto insurance policies usually extend at least some coverage to cars that you rent, so if you have your own car insurance policy, you can usually skip any extra rental car coverage.

You might need rental car insurance if you don’t have your own car insurance or if your personal policy doesn’t cover rentals. Rental cars automatically come with enough liability coverage to drive, but if you don’t have additional coverage, you risk being unprotected after a serious accident or having to pay for any damage to the car yourself.

If you do need rental car insurance, we recommend getting extra liability insurance and a collision or loss damage waiver. You can even get extra liability insurance for a rental car from a third-party company, like Allianz or Bonzah, which offer lower rates than most rental car companies.

How much does rental car insurance cost?

We found that the cost of adding rental car insurance (including a loss damage waiver and personal belongings coverage) from Avis for a sample driver was $17 per day. That wouldn’t be too expensive for a single day trip, but over a five-day trip that’s $85 on top of the cost of renting a car and gas.

Car rental insurance from a third-party company often costs much less than it would if you bought coverage over-the-counter from the rental car company. For the same sample driver, we got a quote from Allianz for $55 for the entire day-trip — $11 per day. You may be able to find better rates by comparing quotes from other providers.

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Types of rental car insurance

These add-ons are what most people mean when they think of rental car insurance. Most car rental companies offer a range of coverage options, and some are more useful than others. Here are some common types of rental car insurance add-ons:

Supplemental liability insurance or protection (SLI/SLP)

Supplemental liability insurance increases the amount of liability coverage that you get when you rent a car. Adding SLI/SLP when you rent a car can give you hundreds of thousands of dollars’ more of liability insurance per accident.

SLI/SLPs have a combined single limit. That means that you’re insured for one amount, not separate amounts for every person involved in a crash like with standard car insurance. For example, if you get $300,000 of liability insurance with your SLI/SLP add-on, you’re covered for up to $300,000 for injuries and property damage after a single accident.

Cost of SLI/SLP: $8 to $17 per day

Who should get it: Drivers who want (or need) more protection than the bare-bones liability coverage that comes with their rental car.

Collision damage waiver (CDW)

A collision damage waiver excuses you from having to pay for any damage to your rental car. Damage waivers aren’t quite a form of insurance coverage, they’re closer to a “get-out-of-jail-free” card that you can use to avoid paying for damage you’d otherwise be on the hook for, like scratches, dents, or damage from animals or vandalism.

A collision damage waiver (CDW), which covers damage to the rental car, can be slightly different from a loss damage waiver (LDW) which covers the cost if your rental car is stolen.

Depending on the rental car company, you may have to buy a CDW and LDW separately , but that’s not always the case. Still, damage waivers are usually worth getting, especially for risk-averse drivers, since paying a minimal daily fee means you don’t have to worry about any damage to your rental car.

Cost of a damage waiver: $12 to $30 per day

Who should get it: It’s a good idea for most people who rent cars (unless they’re already covered through their credit card).

Personal accident insurance (PAI)

Personal accident insurance covers you and your passengers if you’re injured (or killed) while driving the rental car. This type of rental car insurance is a little like your regular policy’s personal injury protection or medical payments coverage.

Keep in mind that if you’re planning to drive your rental car in a state that already requires personal injury or no-fault coverage, your rental car insurance would already provide some coverage for injuries.

Cost of personal accident insurance: $3 to $13 per day

Who should get it: Drivers who don’t have health insurance may benefit from getting PAI, especially if it’s cheap.

Personal effects coverage (PEC)

Personal effects coverage adds coverage for your personal belongings, in case they’re damaged or stolen from your rental car. Adding PEC usually means both you and your passengers are covered if things like your clothing, cellphones, computers, and other valuables are stolen from the rental vehicle. 

You don’t need to add PEC to your rental car insurance if you already have a renters or homeowners insurance policy, since your personal belongings coverage usually extends to cover you while you’re traveling, too.

Cost of personal effects coverage: $1 to $2 per day

Who should get it: Drivers who are traveling with valuable items, like electronics, and don’t already have coverage through home or renters insurance.

Roadside assistance coverage or protection (RAC/RAP)

If you add roadside assistance coverage or protection to your rental car insurance, you’ll be covered for up to a certain amount for lockouts, battery changes, fuel delivery, and more. If you already have a third-party roadside assistance service like AAA, you probably don’t need to spring for roadside assistance for your rental car.

Cost of roadside assistance or protection: $8 to $10 per day

Who should get it: Drivers who are willing to pay a little extra to ensure they’re covered in the event of a breakdown.

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Does my insurance cover rental cars?

Yes, personal auto insurance often does cover rental cars. Most of the time, your policy will cover a rented vehicle the same as it does the car you use every day, but there may be exceptions depending on your insurance company.

If you have your own car insurance policy, it will typically act as the primary insurance for the rental car. That means that, if you’re in an accident in the rental car, your liability coverage will pay out first and the rental company’s liability insurance would only pay for damage if you hit your limits.

If you have full-coverage car insurance, your comprehensive and collision coverage may also cover your rental car. When you rent a car, you’re responsible for paying for any damage to the rented vehicle, but you can make a claim for any damage with your comprehensive or collision coverage.

Do you need rental car insurance if you’re already insured?

Some people who already have their own insurance should still consider getting rental car insurance. You should think about supplementing your personal auto policy with rental car insurance if:

  • You want to avoid making claims on your car insurance policy: If you’re someone who’s made claims before, or if you just have high rates and don’t want to risk making a claim and raising them even more, getting rental car insurance might be a good idea. 

  • You don’t have full-coverage insurance: It’s a good idea to pay for a collision or loss damage waiver if you don’t have a full-coverage policy. Otherwise, you risk having to pay for any damage to the rental car.

  • You don’t have much high liability insurance levels: If you have an existing policy with lower or minimum liability limits, it’s a good idea to get extra rental car liability coverage. That way you won’t have to worry about being stuck with someone’s medical or repair bills after an accident.

  • You’re traveling out of the country: Your car insurance won’t cover you in other countries (besides Canada). You might need car insurance for a trip to Mexico or another country, even if you already have a personal auto policy.

What is rental car reimbursement coverage?

Rental car reimbursement coverage is not a form of rental car insurance. It’s an optional add-on to your regular car insurance that covers the cost of a rental car while yours is in the shop after a covered loss.

Usually rental car reimbursement covers a rental up to a set dollar amount per day. For example, you might be covered for up to $75 per day for a rental car, up to $2,000 total. And it’s not very expensive to upgrade your policy’s rental car reimbursement coverage with higher per-day limits if you need more protection.

Do you need insurance to rent a car?

No, you don’t need car insurance in order to rent a car. Rental cars are already insured by the company that owns them. 

That means that if you damage someone else’s property in an accident, the injured person will make a claim with the rental company’s insurance for the cost of repairing or replacing their damaged stuff.

Although you don’t need your own insurance to rent a car, you’d be responsible for paying for the cost of repairs (or injuries) that you cause if the rental car’s insurance were to run out. Depending on the severity of the crash, that could cost you thousands of dollars.

You could also run into problems if you’re hit by an uninsured driver. Most rental car contracts do not provide any coverage for uninsured drivers. This means that if your rental is damaged by someone without any (or enough insurance), you’d be stuck paying for the damage yourself.

Bottom line: You don’t need insurance to rent a car, but it’s worth getting more liability insurance and a damage waiver from your rental car company (or a third-party company) to avoid paying possibly thousands of dollars out of pocket after a serious crash — especially if you’re renting a car for awhile.

Which credit cards offer rental car insurance?

Some credit cards come with rental car insurance. The coverage that comes with a credit card is basically the equivalent of the collision damage waiver you can get from the rental car company — it usually covers damage or theft, up to the full value of the rental car. 

Your credit card’s rental insurance is free — there’s no need to add it to your card or activate it. But it’s a good idea to review your card’s terms of service if you’re going to rent a car.

The rental car insurance that comes with your credit card is usually (but not always) a form of secondary coverage. That means that it will fill in whatever gaps your regular car insurance has — or in some cases, it means that you’ll still have to buy additional coverage through the rental car company.

Some credit cards that come with rental car insurance include:

Chase cards with rental car insurance
  • Sapphire Preferred and Reserve cards
  • Hyatt and World of Hyatt cards
  • United Explorer and United MileagePlus cards
  • Amazon Rewards Visa Signature cards
American Express cards with rental car insurance
  • Green, Gold, and Platinum cards
  • Hilton Honors and Starwood Preferred Guest cards
  • Delta SkyMiles cars
Capital One cards with rental car insurance
  • Venture X, Venture Rewards cards

It’s important to note that credit cards don’t come with liability insurance for rental vehicles. For that type of coverage, you need a personal auto policy or extra insurance from the company where you rented the vehicle.

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Frequently asked questions

Is it necessary to buy rental car insurance?

Unlike car insurance, buying rental car insurance isn’t mandatory. But you might want to buy extra rental car insurance if you’re not already covered by a personal auto policy of your own (or your credit card). If you don’t have your own insurance, you can get coverage through the rental car company or a third-party rental car insurance company.

Who pays for damage to your rental car after an accident?

You’re responsible for paying for any damage to your rental vehicle. Assuming you were in an at-fault crash or your car suffered damage that wasn’t caused by another driver, you can make an insurance claim for your rental’s damage through your own car insurance or your credit card. If you aren’t covered by your insurance or credit card, then you’d have to pay for the repairs (or even a replacement) yourself.

Does an accident in a rental car affect your rates?

Yes, accidents in rental cars can make your personal auto insurance more expensive. Making a claim for a damaged rental car is just like making a claim for damage to your own car. Similarly, getting pulled over for a DUI or another driving violation in your rental will also cause your rates to go up.

Author

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

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Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Editor

Senior Managing Editor & Auto Insurance Expert

Anna Swartz

Senior Managing Editor & Auto Insurance Expert

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Anna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.

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