Does My Car Insurance Cover Rental Cars?

Personal car insurance generally extends to rental cars with the same coverage limits and deductibles as your policy. Still, rental car insurance may be worthwhile for some drivers in certain situations. That’s why it’s prudent to know your rental car insurance options before you pick up the keys at the counter.

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Do Rental Cars Require Insurance?

Like any other vehicle, rental cars need car insurance to be operated on the roadway. You’ll need at least liability insurance. It’s state-mandated and pays for injuries and property damage you accidentally cause to others.

Liability car insurance is the basic coverage states require vehicles to have—including rental cars.

It’s also wise to have other types of car insurance that can help pay to repair or replace a rental car you damage or medical bills for you and your passengers if you cause an accident.

Does My Personal Car Insurance Cover Rental Cars?

Your personal auto insurance policy will generally cover a rental car used for personal travel. If you’re driving a rental car for business use, be aware that some insurers don’t cover a vehicle rented for business purposes.

Before booking your rental car, check with your car insurance company to verify whether you have rental car coverage from your current policy and review coverage details.

Common Personal Car Insurance Coverage Types Extended To Rental Cars

Here are common types of car insurance coverage that may be required by states or optional and how they apply to a rental car.


	Liability Insurance Liability car insurance pays others for injuries and damages if you’re at fault in an auto accident. For instance, if you crash into another car while driving a rental car, this will pay for the damage to the other person’s car and injuries the other drivers and passengers suffered, up to the policy’s limits. It also will pay for your legal defense and judgments if you’re sued because of the accident. It is required in most states.
	Personal Injury Protection Personal injury protection (PIP) pays you and your passengers’ medical expenses resulting from an accident when you’re driving a rental car, regardless of fault. It also pays your lost wages and replacement services for tasks you can no longer perform, such as child care. It is required in 15 states.
	Medical Payments Coverage Medical payments (MedPay) coverage pays medical expenses for you and your passengers if you’re in an auto accident in the rental car. MedPay is similar to PIP, but has low limits (typically $1,000 to $5,000) and doesn’t have the extra benefits that PIP provides. It is required in three states (Maine, New Hampshire and Pennsylvania).
	Collision Insurance Collision insurance is an optional coverage that pays to repair or replace your vehicle after an auto accident, minus your deductible. If you crash into another car with the rental car, or crash into an object like a fence, collision insurance will pay for the damage to your rental car.
	Comprehensive Insurance Comprehensive insurance is an optional coverage that pays to repair or replace your car if it’s stolen or damaged due to problems such as fire, falling items like tree branches, flood water, hail, striking an animal or vandalism. For example, comprehensive will help pay for the repairs if your rental car is damaged if you drive through a flooded street. Collision and comprehensive coverage have a car insurance deductibl if you make a claim.

Check Your Auto Policy for Exceptions

Before renting a car, verify that your car insurance coverage extends to rentals and check your policy for exclusions. For instance, your auto insurer may have an exclusion for exotic vehile rentals or rentals over a certain value.

Does My Credit Card Provide Rental Car Insurance Coverage?

Some credit cards provide rental car insurance as a perk. These credit card companies usually require that you use their card to pay for the rental car, are the primary renter and decline the rental car company’s collision damage waiver.

Pro Tip

See if your credit card will pay other costs associated with an accident in a rental car, such as loss of use fees and towing charges.

Depending on your credit card, it may offer primary or secondary rental car insurance.

Most credit cards provide secondary coverage, but the best credit cards for rental car insurance offer primary coverage. Here’s the difference:

Primary coverage. Your credit card will pay out first for a claim. Primary coverage means you don’t have to involve your car insurance company or pay a car insurance deductible.
Secondary coverage. Your credit card will only pay the amount not covered by another insurance policy, such as your personal auto insurance. The credit card might reimburse your deductible.

Rental Car Insurance Options

Consider a rental car company’s insurance options when you don’t have other coverage for a rental car or would like to supplement your existing coverage.

For example, maybe you have low liability limits on your personal auto policy and would like higher limits while driving the rental car. In that scenario, you can buy supplemental liability insurance from the rental car company to raise the liability limits. That way your coverage will pay out a higher amount if you cause an accident that injures someone or damages their property.

Here are common coverage types of rental car insurance you’ll find.


	Supplemental Liability Insurance (SLI) SLI provides liability insurance with higher limits. Limits vary depending on the rental car company. For instance, Alamo and Enterprise provide up to $300,000 in liability coverage, while Budget offers up to $500,000. Hertz provides up to $300,000 in most states but up to $2 million in California and Florida. Average costs can run from $8 to $17 a day. Some rental companies refer to SLI as supplemental liability protection (SLP) or liability insurance supplement (LIS).
	Collision Damage Waiver (CDW) A collision damage waiver is technically not insurance but waives your financial responsibility if your rental car is damaged or stolen. This coverage is also called a loss damage waiver (LDW). A CDW can cost around $10 to $30 per day. Also known as a damage waiver or loss damage waiver (LDW)
	Personal Accident Insurance (PAI) PAI pays medical bills for you and your passengers if you get hurt in an accident while driving a rental car. PAI typically covers ambulance bills, medical bills and accidental death and dismemberment. It can cost about $5 to $13 a day.
	Personal Effects Coverage (PEC) PEC covers you and your passengers’ personal belongings, such as a laptop or luggage, if they are stolen from the rental car. The cost can be about $6 to $16 a day. Some car rental companies sell PAI and PEC together, such as Budget, which calls it Personal Accident and Effects Coverage (PAE) coverage. Note that most renters and homeowners insurance policies will help pay to replace personal items stolen from a rental car, so you may not need this coverage from a rental company.
	Roadside Assistance Roadside assistance plans cover rental car problems you have on the road, such as lockout service, replacement of lost keys, flat tire service, towing, dead battery jumpstarts and fuel delivery.

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Do You Need Rental Car Insurance?

Your specific situation will determine whether you need rental car insurance. Here’s our take on when to consider or skip buying insurance coverage at the rental car counter.

Coverage	Should consider if	Can probably skip if
Supplemental liability insurance	You don’t have an auto insurance policy or have one but with only state minimum liability limits and want higher limits.	You have a personal car insurance policy with adequate liability limits.
Collision damage waiver	You aren’t paying with a credit card that provides coverage if the rental vehicle is stolen or damaged. Or your personal car insurance doesn’t include collision and comprehensive coverage.	You have collision and comprehensive insurance on your auto policy that extends to your rental car. Or your credit card covers the rental if it’s damaged or stolen.
Personal accident insurance	You don’t have medical coverage (such as PIP) under your auto policy or personal health insurance that would cover your injuries from an auto accident, and you want some.	You have PIP or MedPay coverage as part of your personal car insurance policy. Your health insurance policy may also already provide adequate coverage.
Personal effects insurance	You don’t have another type of insurance policy covering the theft of personal items from the rental car and want this coverage.	You have a home, condo, or renters insurance policy that covers personal items stolen from a rental car.
Roadside assistance	You don’t have roadside assistance from another entity and want coverage for the rental car so that you won’t be stranded on the road due to specific situations, such as a flat tire.	You already have roadside assistance coverage through your personal car insurance policy, credit card or auto club (such as AAA).

Rental Car Insurance Alternatives

In addition to your personal auto insurance, you may already have existing coverage from other policies that can extend to your rental car for certain needs. This can include:

Your health insurance. Most health insurance policies will cover medical expenses from an auto accident during a rental car trip within the U.S. Your deductible, copays and coinsurance will apply.
Your home, condor or renters insurance. Homeowners insurance, condo insurance and renters insurance cover your personal belongings for theft, even when stolen from a rental car. For example, you can file a claim with your homeowners insurance if your laptop is taken from your rental car.
A travel insurance policy. Some of the best travel insurance companies include limited coverage for rental cars in their top-rated plans. Typically, benefits are paid if the vehicle is stolen or damaged due to unforeseen events, such as a crash, severe weather, vandalism or theft. Examples include: IMG’s iTravelInsured LX plan provides $40,000 in rental car coverage, PrimeCover’s Luxe has $50,000 and Trawick International’s Safe Travels Voyager has $35,000.
Non-owner car insurance. Non-owner car insurance is liability coverage you can buy if you don’t own a car. It’s a good option for drivers who frequently rent cars and want to carry their own liability auto insurance.
Umbrella insurance. If you cause a car crash in your rental car that exceeds your liability limits on another policy (like your personal auto insurance), umbrella insurance pays the excess amount up to the policy limits.

Stand-Alone Rental Car Insurance

If you don’t have auto insurance or other policies or benefits covering a rental car, you may want to consider a stand-alone policy.

Some insurance companies sell rental car insurance as a stand-alone policy you can purchase before your trip.

Stand-alone policies can be cheaper than coverage the rental car agency offers. If you want to buy rental car insurance, comparing quotes before going to the rental car counter is wise. Here are some options:

Allianz Global Assistance
Bonzah
Rental Cover
Sure

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Rental Car Insurance Frequently Asked Questions (FAQs)

Is rental car insurance worth it?

Rental car insurance may be worth it if you don’t have adequate coverage through a personal car insurance policy, credit card or insurance policies. If you don’t have other coverage options—or want to fill coverage gaps—rental car insurance can be worth it.

For example, if neither your auto insurance nor credit card covers damage to a rental car, it’s worth considering CDW coverage from the rental car company or a stand-alone policy.

Do rental car companies have to provide any car insurance?

Some state laws require car rental companies to provide state-minimum liability car insurance. However, if you have personal auto insurance, state laws or rental car companies’ guidelines may say that your auto policy is primary. That means it would be used first if you cause an accident.

If you don’t have a personal auto policy or other coverage for the rental car, you would need to buy liability coverage in states that don’t require rental agencies to provide it, such as California and Texas.

When is a collision damage waiver a good choice?

A collision damage waiver (CDW) might be a good choice if you don’t have a personal car insurance policy or credit card that will cover damage to a rental car or its theft. If you have collision and comprehensive coverage on your auto policy, it should extend to your rental car.

A CDW may also be a wise choice if you have car insurance but don’t want to risk increasing your rates if you have to make a claim for a damaged rental car. Using a CDW will allow you to avoid making a claim on your personal auto policy.

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