what is rental car insurance?
rental car insurance is coverage that protects people when they drive a rental car. You can get rental car insurance through your personal insurance policy, your credit card benefits, or the rental car company itself. Depending on the policy, rental car insurance may cover damage to the vehicle, damage or injury you cause, your own injuries, theft, and loss of personal items.
key points to know about car rental insurance
- The most common types of rental car insurance are liability, collision damage waiver, personal accident, and personal effects.
- rental car insurance costs $61 a day, on average, but it depends on how much coverage you buy and where you rent the car.
- Your personal auto insurance, health insurance, and credit card benefits will generally cover you when you rent a car.
- other alternatives to rental car insurance are non-owner car insurance, temporary car insurance and travel insurance.
- In most cases, your personal auto insurance will cover you as if you were driving your own car.
- major credit cards usually include some level of collision insurance when you book and pay the entire rental with that card.
- If you’re traveling for business, you’ll likely be covered by a company insurance policy. check with your employer to make sure you know what coverage they provide.
- average cost: $10-30 per day
- comparable to: collision and comprehensive insurance
- average cost: $10-16 per day
- comparable to: bodily injury liability and property damage liability insurance
- average cost: $3-9 per day
- comparable to: personal injury protection and medical payments insurance
- average cost: $1-6 per day
- comparable to: homeowners and renters insurance
- Credit card collision protection is often secondary to other forms of insurance. that means it will only kick in after other forms of insurance have been exhausted. this secondary cover becomes primary if there is no other cover from another source.
- Most credit card policies require you to decline the damage waiver offered by the car rental company. Make sure you don’t accidentally cancel your solid credit card coverage with less comprehensive damage waiver.
- credit card coverage only applies to short term rentals and sometimes the limit is as little as 15 days.
- Coverage applies when traveling outside of the US. but certain countries are excluded.
- Certain vehicles, such as trucks or vans, are often excluded from coverage.
- Some car rental companies seek compensation for rental fees they might have charged if the car had had to be sent to a garage for repair. Many credit cards will pay these “loss of use” fees, but others will not. if this fee is not covered by your credit card (or car insurance), you will be responsible for this cost.
- No own car insurance. For people who don’t already have car insurance, it may be more convenient to purchase insurance from the rental company.
- Pay with a debit card or cash. Debit cards generally do not include the collision protection that credit cards do.
- You want to avoid paying a high deductible. Your own car and health insurance policies may have high deductibles that you don’t want to pay out of pocket in the event of an accident.
- potential costs not covered by the alternatives. certain charges, such as administrative and towing fees, or “loss of use” costs when the rental car is repaired, may not be covered by other forms of insurance.
- travel internationally. Your insurance and credit card benefits may not provide the same coverage abroad as they do in the United States.
- You don’t want to compromise available credit. When you drop off a damaged car at the rental counter, some car rental companies will place a hold on your credit card for all or part of the anticipated repair costs, unless you’ve purchased a damage waiver from them.
- business trips. if you are traveling for business, your personal coverage may not apply. If your employer doesn’t provide insurance, you may need additional coverage.
- long-term rentals. If you rely on your credit card for collision protection, remember that your coverage is limited to a maximum of 15 days. using or scheduling the rental for a longer period of time may void insurance for the entire rental period, not just the extra days.
Is rental car insurance worth it?
Rental car insurance is rarely worth it if your personal vehicle is insured and you pay for your rental car with a credit card. You may also not need to purchase rental car insurance if you’re traveling on business.
why you may not need to purchase additional rental car insurance:
Learn more about whether you need rental car insurance.
types of rental car insurance
The most common types of insurance offered by car rental companies are the following:
collision damage waiver
A collision damage waiver, often known as a loss damage waiver, will cover repairs if you cause any damage to your rental car. coverage may exclude certain parts of the car, such as the tires or windshield, as well as certain causes of damage, such as weather or damage while on private property.
Learn more about collision damage waivers.
civil liability insurance for rental cars
The civil liability insurance covers damage to other vehicles, property and people as a result of accidents that you cause while driving your rental car. Please note that this does not cover you, your passengers or the rental vehicle itself.
State minimum levels of liability insurance are included as part of the base rental rate in almost all states. in these cases, any additional insurance you purchase will at most give you higher coverage limits. There are some exceptions, most notably in California, where rental companies are not required by law to carry liability insurance.
personal accident insurance
personal accident insurance covers medical costs for injuries to anyone in your rental vehicle during an accident. Many rental companies in the United States include “personal effects” coverage within their personal accident insurance.
personal effects coverage
Personal items, such as clothing and luggage, stolen from the rental vehicle or lost when a rental vehicle is stolen, are covered under this option. expensive electronic devices (especially cameras) may be subject to limits and exclusions.
cost of rental car insurance coverage by company
note: quotes averaged across major cities for an economy size vehicle.
Learn more about rental car insurance costs.
rental car insurance you may already have
Before you buy additional insurance, start with an inventory of coverage you may already be paying for.
personal auto insurance
Most personal auto insurance policies will cover you when you drive a rental car. If you’re not sure what your policy covers, check with your insurer or agent.
Please note that getting the same coverage does not mean you will get additional coverage when driving a rental vehicle. For example, if you don’t have collision insurance on your personal policy, you won’t have any coverage for damage you cause to the rental car. If you have collision and comprehensive coverage on your insurance policy, don’t forget that you’ll probably also be responsible for a deductible.
Also keep in mind that car insurance generally only covers personal (non-business) use of cars. however, while traveling on business, you may be covered by your employer’s insurance.
personal health insurance
See also: How to pick a good health insurance plan
When making decisions at the rental counter, don’t overlook your health insurance policy, if you have one. Most health insurance plans will cover any medical care you need while traveling in the US. uu. – and sometimes in many other countries. Make sure you understand the terms of your policy, especially when traveling outside of the US. uu.
Just like with your auto policy, remember that if you rely on your health insurance and need medical treatment after an accident, you will be responsible for any health policy deductibles and copays.
credit card benefits
When you reserve and pay for your rental car with a major credit card, you’ll usually get coverage for theft or damage to that vehicle, among other benefits.
This is how this protection works:
For details on car rental coverage from each major card network, take a look at wallethub’s picks for the best credit card car rental insurance.
homeowners or renters insurance
Homeowners and renters policies generally cover personal possessions while away from home, including items stolen from a rental car. Although there are often limitations with high-end electronic equipment and cameras, this insurance is often better than the daily rate coverage offered by the rental company. coverage may be denied if the rental or travel is for business purposes.
If you are already purchasing travel insurance, this may provide you with sufficient medical and personal effects coverage. make sure you don’t get duplicate rental car insurance.
car insurance for non-owners
People who don’t own a car can still get their own auto insurance by purchasing a non-owners policy. For people who rent cars frequently, this can be much more affordable than buying the rental company’s policy for each rental.
when should you buy additional rental car insurance
With all the alternatives available, is there any reason to buy insurance from the rental agency? there are a few worth considering: