Jessica Sautter is a Content Writer for 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: Nov 7, 2020

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Key takeaways...

  • Generally, a car rental agency will not rent you a car if you do not provide some sort of proof of insurance
  • Many rental insurance agencies allow you to use your own car insurance to cover a rental car
  • If you use your own policy, it must cover rental vehicles

Everyone needs to rent a car now and then, and it is always a good idea to ensure you have rental car insurance to cover your liability when you operate a rental car.

Finding low-cost rental car insurance is easy if you know where to look.

Many people believe that the rental agency covers the auto insurance for the vehicles they rent, or they think that their own car insurance will cover them, but this is not always the case.

Get rental car insurance quotes quickly and easily right now by entering your zip code into the FREE box above!

Why You Need Rental Car Insurance


When you rent a vehicle to drive, you are responsible for any damages caused to that vehicle. Damages from an accident, vandalism, or theft are all your responsibility.

Generally, a car rental agency will not rent you a car if you do not provide some sort of proof of insurance.

Whether you purchase insurance from the car rental agency, use your own insurance, or purchase rental insurance elsewhere, the rental agency will want to be assured that their property is protected.

Vehicles from auto rental companies are generally newer vehicles in good condition that have relatively low mileage; this means that the vehicles have not depreciated in value, and any damages or loss will be expensive to cover.

You also have to consider that you need to protect the rental car from damages caused by uninsured drivers, just like you do with your own vehicle.

Otherwise, you will likely be responsible for covering damages by an uninsured motorist.

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Rental Insurance through Your Personal Policy

Many rental insurance agencies allow you to use your own car insurance to cover a rental car, but you need to check with your insurance provider first.

You must have coverage on your car insurance policy that specifically covers rental vehicles.

You also need to check the details of the coverage, because most policies have a limit for how long they will cover a rental vehicle, as well as dollar amount limits, according to the National Association of Insurance Commissioners.

Furthermore, if you do not have collision and comprehensive on your auto insurance policy, then you won’t be able to use it for a rental car.

Because the rental vehicles are still worth quite a bit, they must be covered by a collision and comprehensive package.

Similarly, you also need to check that your coverage will transfer if you are renting a vehicle for business purposes or outside of the U.S.

Most private auto insurance companies will not cover a rental car in a foreign country or if it is being rented for business travel.

Insurance from Your Credit Cards


Many people believe that their credit card will provide rental car insurance, and some certainly do.

Generally, credit cards offer some type of protection for collision and theft; the amount varies from card to card.

However, you need to check the details of the coverage offered before you rely on it, and it needs to be the card you are using to pay for the actual rental of the vehicle.

Credit card coverage can vary from secondary coverage to primary coverage for theft and accident damages to the vehicle.

Secondary coverage only takes over once your other coverage is exhausted, so you will still need to have another form of rental car insurance.

Primary insurance coverage will pay, but it typically has a fee associated with it.

Furthermore, your credit card’s insurance coverage might have limitations or payment policies that you need to know about.

They might not cover certain kinds of automobiles or they might require you to pay for damages upfront and then reimburse you.

Additionally, most credit card rental insurance does not cover injuries, damages to other vehicles, or for loss of personal property.

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Buying at the Counter

You always have the option of buying coverage from the rental car agency, either when you book a reservation online or at the counter when you pick up the vehicle.

Either way, it is important to know that insurance coverage purchased at the counter of the rental agency only covers the renter and anyone named as a driver.

Many people purposely exclude other drivers from a rental agreement to save money.

Furthermore, there is generally a clause in a rental car insurance agreement that negates the agreement if the damages were caused in a risky manner, such as speeding, driving off-road, or driving while under the influence.

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Types of Rental Car Insurance Coverage


Rental insurance is slightly different from your own coverage for your personal vehicle, according to the Insurance Information Institute.

While your own policy is divided into mandatory liability insurance and optional coverage, rental car insurance coverage packages are arranged differently.

The first coverage is called a loss damage waiver or collision damage waiver. This coverage does not actually provide insurance; it waives your responsibility to cover the loss from damages or theft.

Instead, the insurance from the car rental agency covers this liability.

A Loss Damage Waiver might also cover the rental agency’s loss of use of the vehicle while it is being repaired. However, not all loss damage waivers cover loss of use or other costs such as towing or other administrative fees.

You need to be sure that all costs are covered by loss damage waiver.

The next coverage is liability insurance, which covers the costs for injuries and damages you cause to other drivers, their vehicles, and the surrounding property.

This coverage supplements existing liability insurance by increasing the maximum amounts of protection.

Personal accident insurance is another coverage that acts as health insurance or personal injury protection provided by your own insurance. It covers the medical costs from injuries sustained by you and your passengers.

The last coverage is personal effects coverage, which reimburses you if these things are stolen out of your rental vehicle.

Buying Separate Rental Car Insurance

There is also the option of buying rental car insurance for a rental car outside of the policy offered by the rental car agency.

Sometimes, this coverage might be part of a travel insurance policy, or it could be for rental car insurance alone.

This is one option for someone who doesn’t have their own vehicle insurance policy or who doesn’t have collision and comprehensive coverage on their private car insurance policy.

Always review coverage and compare prices between third-party insurance companies.

Prices can vary, so make sure to get as many quotes as possible.

Another option is to check into an umbrella policy with your car insurer or home insurance provider when it comes to liability. An umbrella policy is generally inexpensive because it is added on to additional protection you already buy.

Umbrella policies provide higher coverage limits and a broader amount of coverage.

Benefits of Using Insurance Other Than Your Own


It is certainly tempting to just go with your own insurance policy to cover the insurance for a rental car, but there are some advantages to going with insurance outside of your personal car insurance.

If you purchase insurance from the rental agency, from a third-party provider, or from your credit card company, you will avoid having to make a claim to your personal insurance provider if something happens.

Making a claim can raise your insurance rates, so you can avoid higher premiums on your car insurance if you purchase your rental car insurance from somebody other than your personal insurance provider.

You might also avoid the hassle of having to be reimbursed if you go with the rental agency’s insurance or a third-party provider. Always check with whichever insurance you decide to go with to ensure that they will pay claims

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What to Look for

No matter which insurance policy, or combination of policies, you use for your rental car insurance needs, you need to make sure that you are completely covered.

You need to have coverage that will:

  • Fix the damages to the rental and cover loss-of-use fees
  • Cover the loss if a rental car is stolen
  • Pay for damages you cause to other vehicles
  • Cover the medical costs for you, your passengers, and other drivers
  • Reimburse you for stolen property

Research your different options by calling your car insurance provider, looking at the offerings of all of your credit cards, examining the insurance offered by the rental agency, and getting multiple quotes.

Make sure that your vacation or trip does not include the nightmare of being underinsured in an accident or loss with a rental vehicle.

Get multiple car insurance quotes right here to cover your rental needs by entering your zip code below into the FREE box!