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: Aug 17, 2021

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Key takeaways...

  • When you rent a car, you want to make sure that you have sufficient insurance coverage
  • Purchasing coverage through the car rental company can help cover you for the expenses
  • Check with the National Association of Insurance Commissioners to see what limits your state requires for rental car coverage

For rental car insurance, the most recommended company is Ace Rent a Car, according to J. D. Power and Associates and reported by CNN.

This is based on consumer ratings for the rental company itself, as opposed to its insurance offerings specifically.

When you pick up a rental vehicle, most companies will ask for you to purchase rental insurance from them. They may encourage you by saying you won’t have to worry about anything if you’re in an accident. Whether it’s a scratch or a full loss, they won’t try to charge you for it or go after your insurance. Of course, for those without regular insurance, visitors from other countries, etc., it may make sense. If you don’t want to pay the extra fee, keep in mind your credit card may offer coverage. Your personal insurance policy should also cover rental cars for short periods of time.

If you want to purchase a separate rental car insurance policy, the best company to get it from is a rental car company that generally delivers good and satisfactory rental services at decent prices.

It is easy to find quotes for car insurance companies by entering your zip code into the FREE quote finder box!

What Types of Rental Car Coverages Are Available?

When you rent a car, you want to make sure that you are sufficiently covered in the event of an accident or other loss.

If you do not have the right coverage, you will be responsible for any damages to the rental car and other vehicles involved, as well as any bodily injuries incurred.

Purchasing coverage through the car rental company can help cover you for the expenses. This could be the difference between a nightmare and a stress free vacation. Like your personal accident insurance, you may not always need to use it, but you’ll certainly see the difference if you do. Going without it can cost you thousands after an accident and affect your auto insurance rates for years to come.

Although they are referred to as insurance products, the coverage offered by rental car companies is not covered by actual insurance carriers. So it is not technically insurance.

As a result, they are usually referred to as waivers or supplements.

To help cover damage done to the rental car or if it is stolen, rental companies will offer collision damage waivers, also known as CDW, and loss damage waivers, known as LDW.

Collision damage waivers cover expenses that are related to a collision of any kind, such as hitting another car or other object.

Loss damage waivers help to cover expenses related to damage caused by vandalism or theft. There may be deductibles required, as there are with traditional insurance policies.

To help protect you when you are at fault for an accident, you can purchase liability insurance supplements.

Most states require that you carry a certain amount of liability insurance. If you carry basic insurance coverage and feel that you need more coverage, this supplement will help.

Check with the National Association of Insurance Commissioners to see what limits your state requires.

Car rental companies offer protection if your valuables are stolen from the car. This may be referred to as personal property insurance or personal effects coverage.

To help cover expenses related to medical help for injuries you can purchase accidental death coverage, also known as personal accident coverage.

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How Much Does Rental Car Insurance Cost?

Unlike traditional insurance, the rates don’t vary based on your driving history and other personal factors. They’re meant to average the risk between different drivers. So they have one set price for anybody who chooses to buy this additional insurance.

Who offers the best deals and reliable coverage? Once you understand what types of coverage you can choose from, the next step is to choose which rental company to get your coverage from.

In general, the best company from which to get your rental coverage is the one that is also considered to be the best rental car company. This can vary depending on what you are looking for from a company.

One place to look is J. D. Power and Associates’ website. This site posts rating of different categories and compares a number of rental car companies, based off of consumer opinions.

When comparing the reservation process, pick up and return processes, the fees and costs, the car itself, the shuttle van or bus, and overall satisfaction, Ace Rent a Car comes the most highly recommended.

Ace Rent a Car is not available everywhere, so you can use the rating chart as a guide to choose a different company based off of your priorities.

It is always a good idea to choose a company that has very few, if any, complaints against it. Another source that you can use is the Better Business Bureau.

The Cost of Rental Car Insurance

In most cases, obtaining insurance through a rental car company is more expensive than through a car insurance company.

The Insurance Information Institute gives ranges of what each type of insurance coverage costs on a daily basis.

If you get a collision damage or loss damage waiver, this will usually cost you anywhere from $9 to $19 each day that you rent the car.

Supplemental liability coverage will run you $7 to $14 each day.

If you choose to purchase coverage for personal effects, you will pay between $1 and $4 per day. Insurance for personal accidents will run you between $1 and $5 each day of the rental.

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Reasons to Purchase Rental Car Insurance

The rental car company may make it seem that everyone should purchase car rental insurance, which is not necessarily the case.

However, there are specific reasons as to why buying rental car coverage would be a good way to go.

If you do not own a car, perhaps because you live in a city with ample public transportation, you may have a driver’s license but no insurance.

If you travel and rent a car, you would be amiss if you did not get any rental car insurance.

Coverage would help protect you from having to pay your own money for all of the expenses associated with a driving incident.

If you have car insurance through your personal insurance but only have liability insurance, you should strongly consider purchasing collision damage and/or loss damage coverage from the rental car company.

If you do not want to take the chance that your insurance rates will increase, you may also choose to spend the extra money to purchase full coverage on your rental car.

This would prevent your personal rates from going up in the case of an accident.

Even if you have some coverage through your personal insurance, you may want or need to add additional coverage for your personal property or for medical benefits.

This is especially true if you do not have health insurance coverage or a homeowner’s policy.

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Reasons Not to Purchase Rental Car Insurance

There are times for which purchasing car rental insurance would be a waste of money. If you have enough coverage through your own auto insurance policy, you often do not need to buy anything more.

Even if you don’t have medical coverage or personal property coverage under your car insurance policy, you probably don’t need to add these to your rental car contract if you are covered by a different policy.

Look closely at different sources of insurance coverage to make sure you aren’t getting duplicate coverage with a rental car insurance policy.

Some credit card companies also offer protection for rental cars. If you have this coverage you do not necessarily need to buy more coverage from the rental car company.

This should be looked at closely, however, to make sure you have sufficient coverage.

Rental Coverage through Your Insurance Company

Often, you will have enough coverage for your rental car through your own car insurance policy. If you have what is called collision coverage, it will help pay for damage to your rental car in collisions.

If you have comprehensive coverage, you will be covered for theft, vandalism, and any other damage to the car.

The same rules apply to your rental car as they do to your regular insured car.

This means that you will be responsible to pay the deductible before the insurance company starts to pay.

According to an article from the Insurance Information Institute, you should check your insurance policy to see if towing, loss of use or administrative fees are covered by your personal auto policy.

If not, you can add them as a rider to your current policy or add them temporarily when you rent the car.

Rental Coverage from Your Credit Card

One thing to keep in mind in regards to credit card coverage is that the protection may not be as extensive as that from your personal auto policy or from the rental car company.

Many credit cards will only cover loss or damage to the car that was rented.

This means that if there were other cars involved, your personal property was stolen, or there was damage to other property, you would be responsible for those expenses on your own.

Credit cards often don’t cover bodily injury claims or death. Because card coverage varies so greatly, you should personally check with your credit card company to see if insurance coverage does exist and what it entails.

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