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 16, 2021

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Key takeaways...

  • Rental car companies use newer, lower-mileage vehicles that they keep in superb condition
  • Personal accident insurance covers any medical expenses from an accident
  • Similar to personal car insurance, all rental car coverage have similar limitations or clauses

It is important to consider buying rental car insurance when you are planning a vacation, as no one wants the headache of trying to figure out insurance coverage while on a trip.

But first you need to figure out if you need insurance. Sometimes you need it, sometimes you don’t. If you have a car and already have a car insurance, it’s very likely there is a chance to extend your current coverage to rental cars. However, buying a stand-alone policy might be a cheaper option.

Buying rental car insurance online is a great way to save money. Many people are unaware that there are options for buying such insurance through the Internet, as well as in other places.

While buying rental car insurance online is not the only option, it is one of the better options. Rental car insurance can be very different from your personal car insurance, and you need to make sure that all assets are covered.

Find all of your car insurance options right here by entering your zip code into the FREE box above!

Why you need rental car insurance


Rental car companies use newer, lower-mileage vehicles that they keep in superb condition. Putting a dent in a rental vehicle or causing other damage can cost a pretty penny.

Your personal auto insurance policy must have specific coverage for a rental vehicle.

Furthermore, your personal insurance policy might not cover car rentals that are made for business purposes or that will travel out of the U.S.

Additionally, your personal car insurance coverage might not include additional costs assessed by the rental agency.

If you cause damage to a rental car, the agency may tack on loss-of-use charges to your bill.

Another option that some people believe will protect them completely is the credit card coverage provided through the credit card used to make the rental purchase.

While it is true that many credit cards offer car rental coverage insurance at no additional charge, such features are becoming less and less common. You can automatically have this coverage if it’s included with your credit card. It’s not necessary to call or sign any forms.

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What are the rental car insurance basics?

There are a few different types of car rental coverage that you can purchase, and each has its own associated costs. Usually, you can purchase each type of coverage separately or as a package.

The experts at the Insurance Information Institute, or III, have researched the corresponding costs of each type of coverage when you buy it from the car rental agency, though your costs may vary.

The first coverage is referred to as a loss damage waiver or collision damage waiver. It covers any damage to the rental vehicle or theft to the car. It’s technically not an insurance, but a waiver that indicates that the rental company won’t come after you.

This product actually waives your financial liability for repairs for damages or loss from theft.

The next coverage is liability insurance. This coverage essentially pays for all of the other damages or injuries you cause to other drivers and their cars.

This coverage is similar to the bodily injury liability and damage liability of personal car insurance policies. If you purchase liability insurance from the car rental agency, it usually costs from $7 to $14 a day.

Another coverage is personal accident insurance, which pays for your medical costs from an accident–it is quite similar to personal injury protection.

Lastly, there is personal effects coverage. This coverage pays to replace expensive personal items that are stolen out of a rental car. According to the experts at III, this coverage can run from $1 to $4 per day.

All of these types of rental car coverage might have similar limitations or clauses, just like regular car insurance.

What are the benefits of online rental car insurance?


While there are other options for getting rental car insurance, buying online is a smart move. It has benefits over just about every other way to buy the insurance, as long as you do your research.

First, online rental car insurance is generally much cheaper than buying at the rental car counter.

If you bought a loss damage waiver, liability insurance, personal accident insurance, and personal effects coverage, it can cost you from $18 to $42 a day on top of all your other rental charges.

Rental car insurance is usually much less expensive online.

Next, online rental car insurance usually has lower deductibles or no deductibles, making it a better coverage than your personal car insurance.

It also pays out loss-of-use fees, which your personal car insurance coverage will not.

Furthermore, if you do get into an accident and have to make a claim, online rental car insurance won’t cause your personal car insurance rates to go up, according to CBS Money Watch.

Lastly, rental car insurance that is bought online generally makes payments directly to your debtors. Most credit cards offer rental car insurance that makes you pay first, and then they will reimburse you.

Some rental insurance from credit cards is actually supplemental to another insurance policies, which means that it will only pay out after your primary rental insurance is exhausted, according to TravelSense.

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How to get full coverage

Whenever you buy an insurance package, you want to always read and understand exactly what is covered and what is not. Rental car insurance is no different.

First, you need to make sure that you have an adequate amount of coverage to pay for injuries and damages you cause to others.

You can be sued for damages if your insurance cannot cover the costs.

Then, you need to make sure that you have enough coverage to fix the rental car in the event of a crash or to replace it if it is stolen.

Generally, you will be required to replace the full cost of the vehicle, not the fair market value. Make sure that the coverage you have will also pay for additional costs such as loss of use and towing.

You also might want to make sure you have personal accident insurance, especially if you or any of your passengers do not have private medical insurance.

Ambulance and hospital bills from car accidents can be expensive, and you don’t want to have to pay some, or all, of the bills out of pocket.

Lastly, personal effects coverage is nice to have, especially when you are traveling with expensive items, but it is not as necessary as the other forms of coverage.

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What else should you know?


Every insurance package has exclusions and limitations, and rental car insurance works this way as well. You need to make sure you understand the fine print of your online rental car insurance so that nothing is being left to chance.

Rental car coverage only covers damages caused by drivers named on the car rental contract. Unlike personal insurance, those not listed on the insurance will not be covered by it.

Most loss damage waivers include a clause against reckless or illegal driving.

The rental agency will not pay out if it is proven that the damages were caused because the driver was driving in a perilous or unlawful manner.

Some rental insurance will not cover certain types of vehicles, such as sports cars or trucks. If you are planning on renting such a vehicle, you may need to look a little harder to find coverage.

Which are the best places to get rental insurance online?

There are many sites for finding rental car insurance online, but it will certainly take a lot of time to review and compare different offerings from different companies.

One of the easiest options is to utilize comparison websites that allow you to view the different quotes available to you. Getting quotes is quick and easy, and they can be delivered to you by phone or email in most cases.

Online quotes for insurance also do not have any further obligations, so you won’t feel pressured to buy, like at the car rental agency counter.

Entering your zip code below to compare the car insurance options available to you for FREE!


  1. https://www.statefarm.com/insurance/auto/rental-car-insurance
  2. https://www.iii.org/articles/do-i-need-separate-rental-car-insurance.html
  3. https://www.kiplinger.com/article/cars/T009-C000-S002-how-to-avoid-unnecessary-rental-car-fees.html
  4. https://en.wikipedia.org/wiki/Liability_insurance
  5. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability
  6. https://www.travelsense.org/tips/carrentaltips.cfm
  7. https://www.allstate.com/tools-and-resources/car-insurance/rental-car-insurance.aspx
  8. http://ww1.aaa.com/aaa/164/files/Handbook-7-14.pdf