Does Insurance Cover Rental Cars?

In most cases, coverage types like liability, collision, and comprehensive car insurance extend to rental cars—but check with your insurer to be sure.
Written by Amber Reed
Reviewed by Kathleen Flear
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Anytime you rent a car, you can buy insurance through the rental agency—but in most cases, you don’t actually need it. Depending on your insurance company and coverage options, your personal car insurance coverage could extend to rental vehicles.
Rental cars can get expensive. You might pay more based on the type of car you want to drive or the city you’re renting in. And even if you secure a great rate, buying
car insurance
through a rental agency can jack up the price. 
Of course, no one wants to pay for damage to a car they don’t even own, so many renters don’t feel like they have a choice. But as long as you have a personal auto insurance policy, you probably don’t need extra coverage! Before you buy unnecessary rental car insurance, find out if your personal policy covers your rental car. 
Whether you’re renting a car for the first time or just want more information on insurance options, this guide goes over everything you need to know. We’ll explain what rental car insurance is, what it covers, and how to get it.
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Does personal car insurance cover rental cars?

Yes! In most cases, your personal auto insurance policy will cover your rental vehicle, as long as you have
liability
,
collision
, and
comprehensive insurance
. With these three coverages, you can file claims for property damage and medical bills in the wake of an accident.
Although personal car insurance policies typically do transfer to rental cars, be sure to speak with your insurance agent before assuming your rental car is covered. If your auto insurance only includes your
state’s minimum liability insurance requirements
, then it could be a good idea to upgrade your plan with additional coverage before renting a vehicle.
Some optional auto insurance coverages such as
personal injury protection
and
medical payments insurance
always cover you while driving a rental vehicle, since they apply to the driver (not the vehicle). Additionally, your health insurance may also help pay for medical expenses after an accident in a rental vehicle.
MORE: 7 ways to save money on car rentals

What is rental car insurance?

The term
rental car insurance
typically refers to the coverage you can buy at the rental car counter, which pays for injuries and damages that occur after an accident that happens while driving your rental vehicle
Note that this is not the same thing as
rental car reimbursement
coverage, which pays for the cost of a rental vehicle while your personal car is in the shop after a claimable accident. 
While rental car insurance is not required to rent a car, it’s almost always offered as an add-on option. However, it’s usually overpriced and may not be worth the cost if you already have personal car insurance that extends to rental vehicles. 
If you don’t have your own auto insurance coverage, some rental car companies offer limited-coverage plans that could lower the cost. But these options will leave you with less protection after an accident.

What does rental car insurance cover?

If you don’t have car insurance at all or only have minimum coverage, then purchasing rental car insurance through your rental agency can save you from financial responsibility after an accident or other incident while driving a rental vehicle. 
The highest level of rental car insurance is the collision damage waiver (CDW). Here’s a rundown of what this type of rental car insurance policy covers:
  • Loss of use, value, or revenue to the rental car company
  • Towing charges
  • Administrative fees for making a claim
In many cases, the collision damage waiver is paired with a loss damage waiver (LDW) to cover the cost of a car replacement if the vehicle is stolen during your rental term.
If you don’t have the cash for a high-protection plan, some rental car companies also offer a selection of lower-cost policies, including:
  • Rental car liability coverage: Pays for the other driver’s property damage and medical bills if you’re involved in an at-fault accident while driving the rental vehicle
  • Personal accident insurance: Covers medical costs for you and your passengers after a car accident while driving the rental vehicle
  • Personal effects coverage: Pays for certain types of personal belongings if they’re stolen from your rental vehicle
MORE: How to avoid being unfairly charged for rental car damage

How to tell if you need rental car insurance?

As long as you have a
full-coverage insurance policy
—which includes liability, collision, and comprehensive insurance—then you probably don’t need rental car insurance. You may also have high-protection rental car coverage through your credit card. Read the fine print of your insurance policy or credit card terms (or call an agent or customer service hotline) to find out. 
But drivers who don’t have car insurance at all or who only have minimum coverage should consider purchasing a robust rental car plan through the rental agency. While these plans are usually costly, they can still lead to serious savings in the event your rental car is stolen or you get into an accident.
Key Takeaway Consider rental car insurance through your rental car company if you only have a minimum coverage auto insurance policy—or if you don’t carry car insurance at all.

Where to find rental car insurance coverage

There are a few different ways to get rental car insurance coverage, including:
  • Through your rental car company: This is the most costly, but most straightforward way to ensure you’re protected after an accident in a rental vehicle
  • Through your auto insurance provider: Insurance companies typically extend your personal full coverage, liability, comprehensive, and collision coverage to your rental car
  • Through your credit card: Some credit card companies offer collision coverage for your rental car, as long as you use their credit card to pay for the rental. However, this coverage could be limited and might exclude certain types of vehicles (such as sports cars).
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Finally,
non-owner car insurance
could be an excellent option for drivers who don’t own their own vehicles but frequently make use of rental car services. This type of low-cost liability insurance covers you no matter what car you drive, and pays for any medical or property damage expenses that exceed the other driver's coverage limits
However, because this coverage does not include collision or comprehensive insurance, drivers with non-owner car insurance alone could still be left with some major expenses after an accident in a rental vehicle.
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FAQs

The exact amount you’ll pay for rental car insurance depends on which rental car company you use. But on average, a high-protection collision damage waiver costs between $10 and $30 per day, while lower-protection plans range from $1 to $16 per day.
Most rental car coverage purchased through a rental agency does not have a deductible, but it’s a good idea to check the details of your protection plan to be sure. If your rental car is covered under your auto insurance, then you’ll pay the deductible you chose for your personal policy.
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