Rental Car Insurance in California, Explained

Rental car insurance isn’t automatically offered in California—but you can get it through your existing insurance policy, your credit card company, or the rental agency.
Written by Kianna Walpole
Edited by R.E. Fulton
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If you’re heading to
California
and you plan to rent a car, you may be surprised to learn that you have to have your own separate third-party liability insurance to do so. Before you head off with the keys, check your
car insurance
coverage to see if you meet the state’s requirements for auto insurance.
  • If you don’t already own a vehicle and personal car insurance, you are required in California to have at least a third-party liability insurance policy taken out on a car rental.
  • You can get liability coverage in California through a credit card company, your existing insurance company, or a rental agent. 
  • In addition to liability insurance, renters also have the option of purchasing short-term insurance for extra coverage.

What are the car rental insurance requirements in California?

Across most states, rental car companies automatically provide the state-required minimum liability insurance coverage as part of their standard contract—but not in California.  
You must have
liability coverage
that meets the requirements outlined in
California car insurance laws
when you rent a car.
The minimum required liability protection in California is: 
This pays for any rental car damages and medical costs incurred by someone other than you in the event of an accident. Drivers must also carry proof of liability when operating a rental car in California. This could be your own insurance card or the car rental contract, if you purchase insurance through the rental agency.  

How to get California rental car insurance

In the state of California, there are three ways to get a cheap car insurance policy for your rental car. 
  • Rental agent: Drivers who don’t currently carry car insurance can easily purchase third-party liability coverage directly from the rental agency in California—but keep in mind, rental insurance isn’t automatically offered in California. So, make sure to ask in advance!
  • Credit card: Many credit cards provide free coverage to cardmembers for collision damage and theft when they use their card to rent a vehicle. Granted, this won’t cover the third party liability that’s required in California, but it will often take care of many of the expenses
  • Current insurance policy: If you already own a vehicle in your home state, an existing
    full coverage car insurance
    policy that includes both
    collision coverage
    and
    comprehensive coverage
    will likely extend to the rental car you’re driving. The best way to be certain is to read your
    car insurance declaration page
    and/or talk with your insurance agent. 
But what if you’re just looking for a little added protection above what your personal auto insurance policy and/or credit card can offer? In that case, it might make sense to purchase additional coverage from the rental counter.

Types of rental car insurance

As per California law, all drivers using a rental vehicle must have at least third-party liability coverage. However, if you want extra coverage, there are some additional insurance options provided by car rental companies that could help keep you protected: 
Type of Coverage
Protection
Personal effects coverage (PEC)
Enjoy peace of mind that your personal items, like valuable cameras or technology, are covered up to a set dollar limit if they’re stolen from your rental car. 
Collision damage waiver (CDW)
A collision damage waiver might appear as a loss damage waiver (LDW, LLDW, or CDW), and it takes care of damage to the rental car via a deductible. 
Personal accident insurance (PAI)
This type of insurance covers the costs to treat the injuries of anyone in the rental car during a car accident. 
For rental car coverage, roadside assistance is a great feature to add as it can help when you’re stranded on the side of the road due to a breakdown or flat tire.
Personal injury protection is a type of collision insurance that covers health care expenses after an accident for both the policyholder and passengers. 
This add-on insurance is another form of collision coverage that manages your medical bills—however, it’s dependent on your health insurance policy. 
Each of these coverages is purely optional, but they can provide added peace of mind. It’s important to note that not all of these will be available at your selected rental company, and may have different regulations. Be sure to read your rental agreement carefully to see what exclusions apply to any supplemental coverages you choose to purchase.

Can I take out a temporary (short-term) insurance on a rental car?

If you are staying up for an extended period of time in California, you can also take out a
temporary insurance
policy on your rental car. Note that ‘temporary insurance’ does not technically exist, but there are options that provide short-term relief:
  • Non-owner car insurance
    : Non-owner insurance policies are typically used by drivers that don’t own a vehicle or have regular access to one, but still drive occasionally. Note that this type of coverage does not cover damage to your vehicle. Coverage lasts at least 6 months and costs between $200 and $500 annually.  
  • Short-term coverage for stored vehicles: Some insurance companies may offer solutions for stored vehicles as a result of loss of use. Cars not used for over one month can drop their liability, collision, and medical insurance, which can lower the overall rate. Storage insurance usually protects your vehicle from vandalism, thefts, hail/lightning, and damage from natural events.
  • Pay-per-mile insurance: This type of short-term insurance charges drivers either daily or monthly for how many miles they accumulate. The charge will generally be a base rate plus a few cents per mile.  
Another solution is to buy a six-month policy. Most major insurance companies offer short-term policies for six months, and allow you to cancel when you no longer need it. If you’re planning to stay in California for a six-month stretch, this may also be an option for your rental car. 
Keep in mind: When purchasing a six-month policy and then canceling, remember that you may be charged a cancelation fee.

FAQs

California is an at-fault state, meaning that the person who is at-fault for causing the accident, will have to pay for damages and any injuries that occur. 
If you aren’t the at-fault party in a rental car accident, then it’s likely that your insurance (depending on how much coverage you choose) will foot the bill. 
Yes, you can apply for rental car insurance through Visa. This will include accidental damages for up to a period of 31 days. However, to be eligible, the driver and cardholder must decline the collision damage waiver or similar coverage, if offered by the rental agency.
If you apply for a loss damage waiver or collision damage waiver through the rental agency, this will cover a portion of the damage done to the rental vehicle—however, you may have to pay a deductible to the rental agency to have the car repaired immediately.
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