- In most instances, rental car insurance overlaps with your personal auto insurance policy, meaning you likely won’t need to pay for duplicate coverage. However, you can get an add-on to your travel insurance policy for rental car coverage.
- Rental car insurance is not the same as rental car reimbursement coverage, a standard add-on policy offered by most insurance companies that covers the cost of a rental car if your vehicle is being repaired as part of a claim.
- There are four types of rental car options you can get through a rental agency — a loss damage waiver, liability coverage, personal accident insurance and personal effects coverage.
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Do I Need Rental Car Insurance?
If you already have car insurance for a personal vehicle, you probably don’t need rental car insurance. If you don’t already own a car with insurance, rental companies automatically cover the bare minimum in your state. However, if you want more protection, or if you’re traveling abroad or for business purposes, you might need to get rental car insurance.
Does My Auto Insurance Cover Rental Cars?
Yes, you can use your own car insurance for a rental car as long as your trip is for personal travel. Your personal coverage limits and deductibles will apply. If the trip is for business, your personal auto insurance policy might not cover any type of damage or injury unless you have commercial coverage. However, your company may have a commercial auto policy that can cover the vehicle.
Source: Allstate
Rental Car Insurance Coverage
If you have liability and comprehensive insurance for your personal vehicle, the coverage likely extends to cars you rent in the United States. That said, other variations of rental car insurance exist for those who need it, which we discuss in more detail in the sections below.
Types of Rental Car Insurance
There are four main rental car insurance options that you could be offered through your rental agency: liability coverage, a loss damage waiver (LDW), personal accident insurance and personal effects coverage.
See what each type covers below. Consult your car rental agreement for specific details about your coverage.
Rental Car Liability Insurance
Car rental companies sell liability car insurance. This covers other drivers’ property damage and injuries resulting from an accident you cause. If you have personal liability insurance, your own policy will provide this coverage (as long as the trip isn’t for business). But if you know you’re going to be cruising in Miami alongside Lamborghinis and Ferraris, $10,000 in liability coverage probably isn’t going to cut it, so you may want to up your policy limits.
If you are a frequent traveler but don’t own a car, you can also get non-owners car insurance to cover you in all driving situations.
Rental Car Loss Damage Waiver Insurance
This option waives your responsibility to pay for a total loss, accident damage, environmental damage, theft and vandalism. A collision damage waiver (CDW) is similar, but it doesn’t protect against theft. These waivers basically act like comprehensive and collision policies for the rental. If you already have comprehensive and collision insurance, you probably don’t need this.
However, a loss damage waiver will not require you to pay a deductible, which is another thing to consider.
If you cause damage to your vehicle and it gets sent to the repair shop, the rental car company can charge you fees for each day the car is out of commission. The loss damage waiver will protect you from these fees, as will most full-coverage insurance policies. However, some will not, so it’s a good idea to look into your own policy before you rent a car.
Personal Accident Car Rental Insurance
This type of coverage pays for medical bills for you and your passengers, regardless of who is at fault for an accident. It’s similar to medical payments (MedPay) and personal injury protection (PIP) that you’d get on your standard vehicle.
If you already have either of these insurance products, you don’t need personal accident insurance. Additionally, if your personal car insurance doesn’t cover your medical costs, your health insurance can cover them after you pay your health deductible. Personal accident insurance doesn’t require a deductible.
Rental Car Personal Effects Coverage
This additional coverage option protects your personal items like electronics, luggage and clothing. If you have a homeowners or renters insurance policy, it will cover personal items stolen from a rental car as well.
Other Types of Car Rental Insurance
Besides options from the rental car company, you might be covered through your credit card company or travel insurance plan.
Credit Card Rental Car Insurance
Premium credit cards often include primary coverage for rental cars. Primary coverage comes with high limits and can handle the entire claim, which means your own insurance company won’t know about the claim (and won’t raise your rates).
On the other hand, standard cards often include secondary coverage. This comes with lower limits and requires you to file a claim with your own insurance company first. In either case, you have to book the rental with a credit card to qualify for coverage.
Car Rental Travel Insurance
Travel insurance programs can typically cover collision and loss of use at a cheaper price than the rental car company as well.
International Car Rental Insurance
If you travel to Mexico or Canada, your personal insurance may or may not cover rental cars in those locations. It’s a good idea to speak to your agent to find out before you go. Generally, standard auto insurance companies in the U.S. don’t cover rentals abroad, so it may be wise to purchase rental car insurance in that situation.
How Much Is Rental Car Insurance?
Rental car insurance costs vary depending on the vehicle and location. But, in a word, it’s expensive. Overall, prices range from $31 to $60 per day for rental insurance from these providers.
Car Rental Insurance Cost
Below are a few average prices for coverage per day from popular rental car companies.
| Loss Damage Waiver | Liability Coverage | Personal Accident Insurance and Personal Effects Coverage | Total Daily Rental Car Insurance Cost | |
|---|---|---|---|---|
| Enterprise Rent-A-Car | $30 | $17 | $13 | $60 |
| Budget Rent a Car | $9 | $15 | $7 | $31 |
Hertz | $27 | $19 | $7 | $53 |
| Alamo Rent a Car | $25 | $13 | $6 | $44 |
Is Rental Car Insurance Worth It?
In many cases, it would be cheaper to increase your own insurance limits for a year than to buy rental car insurance for a two-week vacation.
To put these prices in perspective, even if you have a full-coverage policy with high limits, you probably pay much less than $60 per day (which is $1,800 per month) for your personal auto insurance.
Rental car insurance can be expensive — it can easily double your rental costs if you purchase a full-coverage package. You also technically don’t need to purchase insurance since rental cars are automatically covered for the minimum requirements in their state. However, it can still be worth it in some situations.
For example, let’s say you don’t have insurance and you rent a car in California. The required minimum car insurance in California covers up to $5,000 in property damage to other vehicles if you cause an accident, but it doesn’t cover damage to your rental at all.
In fact, no state requires any level of collision coverage or comprehensive insurance, which applies to your own vehicle’s repair bills. It can be a good idea to get rental car insurance if you just have the minimum coverage in your state. This is especially true, considering you will probably be driving an unfamiliar vehicle in an unfamiliar area.
Should I Get Rental Car Insurance?
It depends if you want peace of mind that you’ll be covered in a worst-case scenario. If you want coverage, opt for the rental agency’s collision damage or loss damage waiver if you don’t already have full-coverage insurance.
One study in the Journal of Advanced Transportation found that inattention, poor driving, poor handling and aggressive driving are all associated more with rental cars than non-rental cars. You might be a great driver on your regular commute, but it can be stressful driving in a new situation. Rental car insurance may be helpful.
Car Rental Insurance: The Bottom Line
In this review, we talked about rental car insurance and whether it’s worth it to buy. Below, you can find some of our picks for companies that can help you with car rental insurance.
Best Car Rental Insurance
At the end of the day, it’s more economical to get a full-coverage car insurance policy from a reputable provider than to pay for rental car insurance regularly. Many of the industry’s leading providers — like Travelers and USAA — offer coverage that can apply to rental vehicles when you travel within the U.S. To find coverage that works for you, we recommend comparing car insurance quotes from multiple providers.
Travelers: Best for Most Drivers
Travelers offers a wide range of coverage options with a number of extras like roadside assistance and classic car insurance. After comparing every major provider, we rated Travelers at 9.5 out of 10 and named it the top insurer in the nation. Drivers tend to find affordable rates from Travelers, and many have positive experiences with the company’s claims service.
Our rate estimates show full-coverage insurance from Travelers costs $1,692 per year on average. This estimate applies to 35-year-old drivers with good credit and good driving records. Compared to other national providers, Travelers is one of the top three companies for affordability.
Keep reading: Travelers Insurance Review
USAA: Best for Military Members
If USAA insurance was available to all drivers, we would have ranked it in first place. Drivers consistently find cheap car insurance and great service from the company. If you’re a military member or if you’re a member of a military family, it can be a good idea to get a car insurance quote from USAA.
In our rate estimate analysis, we found that full-coverage policies from USAA cost about $1,741 per year on average. This is also among the lowest costs of all the leading providers we researched.
Keep reading: USAA Insurance Review
Car Insurance for a Rental: FAQ
Below are some frequently asked questions about car rental insurance:
Without insurance on a rental car, you’re responsible for any damage you cause. Rental cars come with the minimum liability coverage in your state, but that doesn’t cover vehicle damage that is your fault.
Yes, your personal insurance usually extends to rental cars. You will have the same coverage and limits that apply to your primary vehicle. If the trip is for business, check with your company to see if it has a business auto policy.
Based on our research, rental car insurance typically costs between $30 and $60 per day.
Our Methodology
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:
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and Discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities are both taken into consideration.
- Industry Standing (20% of total score): Our research team considers market share, ratings from industry experts and years in business when giving this score.
- Customer Experience (15% of total score): This score is based on volume of complaints reported by the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings reported by J.D. Power. We also consider the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements score highest in this category.
Our credentials:
- 800 hours researched
- 130+ companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
