Does My Car Insurance Cover Rental Cars?

If you’ve ever rented a car on vacation, you’ve probably wondered, ‘Does my car insurance cover rental cars?’

The topic of rental cars and insurance coverage is a tricky one. In this article, we’ll help you decide whether you need separate rental car insurance or if your current auto policy already covers rentals.

Will my personal car insurance cover rentals?

The answer to this question is a resounding maybe. While many car insurance policies include car insurance for rental cars, you’ll need to check your policy or contact your agent to be certain.

That said, most personal car insurance policies include coverage types that can extend to rental cars, including:

• Liability Coverage: Protects you if you cause an accident that hurts someone else or damages their property.

• Collision Coverage: Reimburses the cost of repairs regardless of fault (i.e., even if another driver causes the accident).

• Comprehensive Coverage: Helps repair damage caused by something other than a direct accident, like theft, vandalism or weather-related incidents.

If your policy doesn’t include these car insurance coverage types (or if you’d like to be especially protected when renting a car), you can consider rental car insurance.

Do I need insurance to rent a car?

This is a common question. Surprisingly, the answer is no, you don’t need your own personal car insurance to rent a car.

However, since most states require some form of auto insurance to drive at all, the rental company will require you to purchase temporary rental car insurance coverage for as long as your drive their car.

What is rental car insurance?

Rental car insurance coverage is what it sounds like—it’s a separate form of auto insurance that you can purchase while driving a rental car.

The protection it provides falls into five categories:

1. Supplemental Liability Insurance: The same liability coverage is included in many personal car insurance policies, just added on for rental cars.
2. Collision Damage Waiver (CDW): Sometimes referred to as a Loss Damage Waiver (LDW), this covers damage to the rental car from a collision, theft, vandalism or other scenarios.
3. Personal Accident Insurance (PAI): Helps with the cost of medical expenses due to an accident while driving a rental.
4. Personal Effects Coverage (PEC): Reimburses the cost of personal items stolen from a rental car.
5. Roadside assistance: Covers the costs of emergency assistance for things that can happen on the road, like a flat tire, lost keys and more.

Additionally, if you need car insurance on vacation, you can add vehicle rental and trip interruption coverage to your auto insurance for a rental vehicle. With this protection, you may be reimbursed for a rental car if you have a covered claim. If you have an accident more than 100 miles from home, you could also apply this coverage to travel expenses like transportation, lodging and meals. Expense limits differ by state, so talk to your insurance agent about the types of coverages available where you live. 

How does rental car insurance work?

When making a claim on rental car insurance, the first step is notifying both the rental company and your personal auto insurance provider. Document the damage (or loss) with photos and gather peripheral info, like police reports or witness statements.

Then, your insurance will go to work. An adjustor will assess the damage and determine payout based on your level of coverage.

Does my credit card cover rental car insurance?

Sometimes, a credit card and rental car insurance do work together. Many credit cards offer rental car insurance as a rewards benefit, but the specifics can vary. This coverage usually applies when you pay for a rental car with said credit card, at which point the credit card company will provide a secondary Collision Damage Waiver (CDW) for you.

Note the word “secondary”—this type of coverage is usually only a supplement to your personal auto insurance, so keep that in mind.

If you’re ready to add coverage or change your insurance policy, talk to your insurance agent—they can help you determine how much coverage you need, answer any questions and provide an auto insurance quote.

Updated 7-19-24