Does Car Insurance Cover Rental Cars?

Verify what your personal auto insurance covers if you plan to drive a rental car without getting a short-term policy. It’s illegal to drive a vehicle, rental car or otherwise, if it lacks minimum coverage. On top of that, rental car agencies typically don’t provide coverage of their own.

Major auto insurers typically extend your coverage to rental cars, but this isn’t always the case. Also note that auto insurance companies usually only provide coverage for drivers when they’re in the U.S., Canada or territories such as Puerto Rico. Car insurance does not cover rental cars in other countries, so purchase your own coverage if you’re heading elsewhere.

As you determine whether your personal auto insurance policy covers rental vehicles, consider the value of your car compared to that of your temporary car. If the rental car is worth significantly more than your model, you may want to set higher coverage limits for the short term.

Will Credit Card Companies Cover Rental Cars?

Many credit card companies do offer some form of rental car insurance coverage if you use your card to rent the vehicle. Your credit card issuer might reimburse high deductibles on car insurance if you make a claim on a rental car, or it could even cover the value of the rental vehicle in the event of a total loss or a loss of use.

You could receive either primary or secondary coverage from your credit card company. Those with primary coverage will have their credit card issuer cover most damages, while drivers with secondary protection receive benefits only after auto insurance pays for most of the claim. Check with your credit card company to see which type of coverage you qualify for.

If you need cheap car insurance to cover a rental car or are looking to increase your protection, consider the following insurance products:

• Liability insurance: It’s absolutely essential that all rental cars receive enough coverage to meet or exceed state minimum coverage requirements. Liability protection isn’t optional, so nearly all motorists must provide proof of coverage. You’ll find that there are two types: bodily injury and property damage liability insurance.
• Loss damage waiver (LDW): Often known as a collision damage waiver (CDW), an LDW waives your liability if your rental car is damaged or stolen. This choice falls under collision coverage and comprehensive coverage for those using a personal policy.
• Personal effects insurance: This insurance add-on covers personal items that might be stolen from your rental car. Personal effects insurance is a smart coverage option for those heading to cities known to have many car break-ins. While personal effects coverage is standard for homeowners or renters insurance, that’s not true of cars.
• Personal accident insurance: If you have a car accident while driving your rental car, personal accident protection covers medical expenses for you and your passengers. This option is extremely similar to medical payments coverage and personal injury protection in that it covers most medical bills.

If you have minimum coverage car insurance on your personal vehicle, it may be smart to add an LDW or personal effects coverage to your rental car. You could face a greater likelihood of getting into an accident on unfamiliar roads when driving a rental, and you may get valuable possessions stolen. Also, consider adding additional coverage if you have a rental car model that’s pricier to replace than your own vehicle.

Note that rental car reimbursement coverage relates to getting a complimentary replacement vehicle if yours is damaged or goes to the repair shop. In other words, it’s not a coverage type you’ll pick up when intentionally searching for a rental car.

While car insurance does cover rental cars most of the time, make sure to check for exclusions during your own research. Ask your auto insurance agent and your credit card company before renting to understand exactly what coverage you already have.

Drivers with minimum insurance should strongly consider raising their rental car coverage level. It’s expensive to repair or replace a rental car, and the slight cost to add a collision damage waiver is worthwhile for the majority of motorists.

Top Auto Insurance Recommendations

If you want to find the best rates on auto coverage, make sure to compare car insurance quotes from multiple providers. State Farm and Geico are two car insurance providers that cover rental cars, and we’d suggest looking at them as you search for affordable premiums and peace of mind on the road.

State Farm: Best Customer Experience

We give State Farm, the nation’s most popular car insurance provider, a 9.2- out of 10.0-star rating and our Best Customer Experience award. State Farm holds an C- rating from the Better Business Bureau (BBB) and ranked highest for customer satisfaction among large insurers in the J.D. Power 2023 U.S. Insurance Shopping Study℠.

Further reading: State Farm insurance review

Geico: Best for Budget-Conscious Drivers

Geico is known for competitive rates and widespread availability, which are two reasons behind its 9.3- out of 10.0-star rating. We also give Geico 9.5 out of 10.0 stars for its strong industry reputation and note its A+ rating from the BBB. In short, Geico is a reliable auto insurer with excellent rates for most types of drivers.

Further reading: Geico insurance review

Below are frequently asked questions about whether car insurance covers rental cars.

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

Here are the factors our ratings take into account:

• Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
• Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
• Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
• Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
• Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.

Our credentials:

• 800 hours researched
• 45 companies reviewed
• 8,500+ consumers surveyed

*Data accurate at time of publication.