Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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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 29, 2020

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Key takeaways...

  • Most states require that you carry property and bodily damage liability coverage
  • Many people are confused as to whether their personal auto insurance policy covers them when they rent a car
  • Some credit card companies do not cover personal liability for death or bodily injury claim

Before purchasing rental car insurance that may be unnecessary, make sure that you do your research to determine if you need it and if you do, what exactly you need to get.

If you are renting a car, you might not even think about purchasing insurance for it until you are standing at the counter.

At that point, you may be so confused that you either purchase too much or nothing at all.

If you do need it, it is often much cheaper if you get coverage for your rental car from another source.

Start a search for cheap rates for car insurance right here by entering your zip code above in the FREE quote box!

Table of Contents

Rental Car Coverage from Your Own Insurance Company

Most drivers are required to carry some type of car insurance, as outlined by your state department of insurance.

Many people are confused as to whether their personal auto insurance policy covers them when they rent a car.

On most auto insurance policies, you are covered no matter what car you are driving. This means that it doesn’t matter if you are driving a friend’s car, your own car, or a rental car.

This being said, you need to examine your personal auto insurance policy to see what specific coverage you do carry, as this will determine if you have coverage for a rental car.

Most states require that you carry property and bodily damage liability coverage.

If this is the only coverage you have and you are in an accident in your rental car, your insurance company will pay for the damages to the other vehicle and passengers but not to your rental car.

The types of coverage that you need to have on your personal policy in order to cover your rental car are comprehensive and collision coverage.

Comprehensive will cover you for things such as fire, vandalism, theft, and damage done to the rental car that is due to something other than hitting something.

Collision coverage will help pay for damages done to your rental car that result from hitting another vehicle or object.

Keep in mind that if you have collision and comprehensive coverage, you will still be responsible for paying your deductible before the insurance benefits start to kick in.

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When to Purchase Rental Car Coverage

If you have collision and comprehensive coverage, purchasing rental car coverage from the rental car company may not be necessary.

If you only carry basic coverage, which usually refers to liability coverage, you may want to consider purchasing the coverage offered at the rental counter.

If you do not currently own a car, there is a pretty good chance that you don’t carry any auto insurance at all.

Even though it is usually more expensive than a personal insurance policy, it is better than not being covered at all.

Even if you do carry full coverage on your personal auto insurance, you may choose to purchase rental car insurance anyways.

If you are prone to accidents and are worried about your insurance rates rising because you are considered to be a high-risk driver, you may avoid this increase by going through the rental car company for your trip’s insurance.

Rental Car Insurance from the Rental Company

One of the ways that rental car companies make money is through the sale of insurance for your car rental.

If you get full coverage of your rental car from the rental company, it will usually be much more expensive than going through your own insurance company, but at times it is necessary.

This being said, it is a convenient way to purchase coverage that you do not have otherwise, and it is only temporary.

You also do not have to purchase all of the coverage offered by the rental company.

For example, if you have liability on your personal policy, which most drivers should, but you feel like the limits are pretty low, you can add a liability insurance supplement.

How Rental Coverage from a Rental Company is Different

One way that coverage through a rental car company is different than through your insurance company is that the coverage offered is not technically an insurance product.

There is not an insurance company that sells or underwrites policies to the rental car company. Instead, rental car companies call them waivers.

The types of waivers offered include collision damage and loss damage. Other than the name difference, they are basically the same as collision and comprehensive coverage.

One thing that rental car coverage may provide that your personal insurance does not is a loss of use.

This refers to the amount of money that the company loses while it a rental car is being repaired rather than rented. You may want to consider purchasing this type of insurance.

Rental car companies also offer personal effects coverage. This covers anything that may be stolen from the car or even lost.

If you have a renters policy or homeowners policy, check with your agent to see if you have coverage for these types of items and what your deductible is.

Many rental car companies will offer personal accident insurance or something similar. This covers expenses related to medical care or accidental death.

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Rental Car Coverage from Your Credit Card

One alternative for rental car insurance that many don’t consider is getting it through your credit card company. Before renting a car, check with your different credit card providers and see if any of them offer rental car coverage.

If one offers better coverage than the others, purchase your car rental with that card and you will automatically be covered for damages, which often means that you won’t have to purchase extra coverage.

According to the Insurance Information Institute, the coverage is often only good for your rental car and not the other cars involved.

In this case, you would need to either use your own insurance company or purchase additional rental car coverage.

Some credit card companies do not cover personal liability for death or bodily injury claims. You would need to make sure you can get this coverage from somewhere else.

How to Choose Rental Car Insurance

If you have decided that you want or need to purchase insurance coverage from a rental car company, your next step should be to make sure you choose the best company.

If cost is your greatest concern, you can do an Internet search for cheap rental companies.

Keep in mind that if they advertise cheap rates, sometimes you get what you pay for. Cheap does not always mean the best deal.

You should always do a little bit of research before you choose to go with a rental car company to rent a car and subsequently purchase insurance from.

One way to find out more about a rental car company is to look at how other consumers rate it according to different categories.

J. D. Power and Associates can give you a good idea about how different companies rate according to the fees and costs, reservation process, pick-up process, return process, the rental car itself, and shuttle bus.

Another way to find out if the company is good is to contact the Better Business Bureau. If there are complaints against a company you are considering, you can find out through the website.

No matter which car rental place you choose, don’t purchase the rental coverage blindly. This will guarantee that you have appropriate coverage for the right price.

Car insurance rates can be compared right now by entering your zip code below in the FREE box provided!

References:

  1. http://naic.org/state_web_map.htm
  2. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability
  3. https://www.geico.com/information/aboutinsurance/auto/
  4. https://www.progressivecommercial.com/coverages/liability/
  5. https://en.wikipedia.org/wiki/Damage_waiver
  6. https://www.progressive.com/auto/insurance-coverages/
  7. https://www.iii.org/article/what-covered-standard-homeowners-policy
  8. https://www.aflac.com/individuals/products/accident-insurance.aspx
  9. http://www.iii.org/articles/do-i-need-separate-rental-car-insurance.html
  10. http://www.bbb.org