Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 21, 2020

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Key takeaways...

  • Rental car insurance will protect you financially if there are any damages to your rental car or if there are damages caused by it
  • If you have comprehensive and/or collision coverage on your personal policy, your rental car might be covered, but there is no guarantee
  • A rental car accident claim may also negatively affect your personal policy and premiums and categorize you as a high-risk driver
  • Overall, there are three possible insurance options that rental car coverage may include

We have all been in situations before where we are going on vacation or on a business trip and end up having to rent a car to get around. And I’m sure many of us have then had that rental car damaged, either through your own fault or something beyond your control.

Most rental car agencies offer a rental car insurance option as part of your rental package, but these car insurance options can be exorbitantly expensive, and you may end up paying almost the same for insurance as you did to rent the car in the first place!

However, if you are not covered by rental insurance, then you may be held personally responsible for paying for any damages to the car while it is in your possession, which could end up being thousands of dollars.

So what is the solution? And do you even need rental car insurance at all?

Well, there are numerous options available to you if you are looking to purchase rental car insurance liability. There are many car insurance companies out there who offer temporary insurance policies specifically for rental car drivers.

By comparing quotes from several different companies, you can find adequate insurance cover at a reasonable price.

As for the next question, whether rental car insurance is even necessary, the short answer is yes. Many financial publications and reviews advise individuals that rental car insurance is a ripoff and should never be purchased.

However, this advice is misguided — forking out that extra bit of money may just be the wisest choice you could make. Following are the top four reasons why you should purchase rental car insurance liability.

If you’d like to ensure you and your car are fully covered, enter your ZIP code above and compare at least three to four policies!

Your Current Insurance Policy May Not Cover Damage To Rental Cars

Before deciding on whether or not to purchase rental car insurance, the first thing you should do is contact your current insurance provider, who provides your regular automobile insurance.

If your automobile policy has collision and comprehensive car insurance coverage, then you may well be covered for damage to a rental car that falls within the maximum insurance limits of your current policy.

You should also contact your credit card provider if you are planning on paying for your rental car with a credit card, as some companies offer rental car insurance as a cardholder benefit.

However, many insurance companies don’t cover damage to rental cars or even loss of personal property while in a rental car; also, if you allow additional drivers who aren’t covered on your insurance to drive your rental car, they will not be covered.

For all of these reasons, you should take out rental car insurance to ensure that you will not have to incur any damage responsibility in the event of an accident.

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Loss of Use Coverage

In many states, even if you are covered by your own insurance policies, your car insurance doesn’t cover the cost of loss of use — what this refers to is the amount of money lost in rental fees by the car rental company while the rental car is in the shop getting repaired.

This amount can add up quickly when there are significant damages to the car.

In order to get complete cover including loss of use cover, you will need to purchase car rental insurance.

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Claims Could Increase Your Premiums

Even if you can cover your rental car on your personal auto insurance policy, it may not be a cost-effective option to claim for damages on a rental car.

Firstly, you may be more likely to cause an accident while driving a rental car, because you are driving an unfamiliar car in a location that you don’t know.

Secondly, if you claim for an accident from your insurance company, you may be marked as a high-risk driver, and your insurance company could push up your premiums by a few hundred dollars per month!

When comparing this increase in premium payments, the few dollars a day that you will pay for rental car insurance is well worth it.

Any Insurance Is Better Than No Insurance!

When you are renting a car, you may think that you will not get into an accident during the rental period. However, everything is clear in hindsight.

If you are in an accident or cause personal injury or property damage to someone else, you could have to spend years paying off the damages through a payment plan or may even have to go to court if the injured parties decide to take legal action against you.

Over time, these costs could amount to thousands of dollars. It is undoubtedly a wiser option to take out rental car insurance.

There are a few rental car insurance options that are required to be offered by most states in America, such as:

Collision Damage Waiver

This insurance allows you to walk away from the rental car without any liability, even if you were responsible for damage incurred on the car.

You won’t even have to pay a deductible, which you may have had to pay if you had chosen to be covered by your personal auto insurance.

Liability Insurance

Liability coverage usually protects you for up to $1 million in personal property damages or bodily injuries.

Most states require car rental companies to provide a minimum liability cover on all rental cars at no additional cost to you.

Personal Effects Coverage

Personal effects coverage covers the cost of any personal items that were stolen from your rental vehicle. Usually, these items are not covered by your personal insurance.

It only costs around $1 – $4 a day, and these few extra dollars a day are worth it when you consider the cost of replacing expensive personal effects such as laptops and iPods.

After reading these four reasons why you should purchase car rental insurance, I am sure that you will make the wise choice when next renting a car.

If you’d interested in comparison shopping for better and more affordable auto insurance, enter your ZIP code below and start today!


  1. https://www.thesimpledollar.com/rental-car-insurance/
  2. https://www.thebalance.com/comprehensive-vs-collision-coverage-527402
  3. http://critzos.com/uncategorized/property-damage-after-a-car-accident-what-covers-the-loss-of-personal-belongings/
  4. https://www.thebalance.com/what-is-a-high-risk-driver-527253
  5. https://www.cbsnews.com/news/heres-how-much-your-rates-could-rise-after-an-accident/