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Rental Car Insurance

Do You Need Rental Car Insurance?

Maybe you’ve been here before. You’ve just come off the plane, picked up your baggage and gone to the rental car counter. You’re tired from the flight, about to begin an ambitious vacation or a challenging business project. And, this is the point at which you’re asked, “Do you want insurance with that?”

Most travelers, facing that question from the rental representative, have the vague notion that they don’t really need to buy rental car insurance – which somehow is covered already. With just enough doubt in their minds, and the need to make a quick decision, perhaps they buy it just to be safe.

So, which is it?

Do you need to buy rental car insurance or not?

Truth be told, there isn’t a one-size-fits-all answer. However, you can likely reach a conclusion you’re comfortable with by considering these three questions.

1. What Types of Rental Car Insurance Are Available?

Typically, car rental agencies will offer you four types of insurance to purchase:

  • Collision damage waiver – The rental car company won’t charge you for a damaged or stolen vehicle when you buy this.
  • Supplemental liability protection – Electing this will ensure you’re covered for costs to others if you cause an accident in the rental.
  • Personal accident insurance – This coverage will pay for injuries or death of the driver and passengers of your rental car.
  • Personal effects coverage – Reimburses you for stolen personal items while renting the car.

2. What Rental Car Coverage Might I Already Have?

Start with your personal auto insurance. It’s likely that your policy will provide the same level of coverage for your rental as it does for your own car. That usually includes liability insurance, and, depending on the policy you purchased, may include collision, comprehensive and medical payments, too. There are exclusions, however. Some insurers won’t cover rentals in a foreign country, or rentals that are being used for business. Get in touch with your independent insurance agent to verify your coverages.

Next there’s your credit card. Most cards offer some degree of coverage, but it varies widely. Coverage is usually secondary, designed to step in and pick up where your auto insurance leaves off, and it tends to be mostly confined to collision, damage and theft. For coverage to apply, most cards require that you decline the rental company’s collision damage waiver and pay for the car in full with the card that provides the protection. Again, contact your card company to find out exactly what is covered.

Then, consider your health and life insurance, too. If you’re in an accident involving a rental car and you have these policies, you likely have coverage for your own costs. Plus, with your homeowners insurance, you may have personal property coverage to help repair or replace valuable belongings that are lost, damaged or stolen while you’re in a rental. Your deductible and policy limits will apply, and the same goes for renters insurance or condo insurance.

3. What Rental Coverage Might I Be Missing?

In the event something does happen to the rental car, you may be looking at loss of use and diminished value fees, and your regular policy may not cover them. Loss of use is the income that the rental agency loses due to the vehicle being in the shop for repairs, and diminished value is the calculated reduction in a vehicle’s resale value as the result of an accident. Credit cards sometimes cover these, but be aware that they may require documentation that rental agencies can be reluctant to provide.

So, before you make that next trip, give us a call and check with your credit card company. That way you’ll be ready to make an informed decision when you get to the rental car counter.

Reposted with permission from the original author, Safeco Insurance®.



Tuesday, November 3, 2020 at 10:40pm EST

Thank you for the great information on car insurance. I think it’s a great idea to figure out what your deductible will be. I will be sure to look out for that if we ever need to change out plan.
If you want more info about all type of insurance then please check this website.


Alen Freak

Tuesday, February 27, 2024 at 10:56pm EST

The insight about credit card coverage is intriguing as well. Knowing that it typically serves as secondary coverage and requires declining the rental company’s collision damage waiver is valuable information. I’ll contact my credit card company to understand the specifics of what they cover. Thanks for sharing this important information! It’s definitely prompted me to take a closer look at my insurance policies.

Robert S.

Thursday, November 19, 2020 at 12:21pm EST

Rental care insurance is worth having, especially if you travel for business and often rent vehicles to get around. You never know what may happen, so having coverage helps.

Penelope Smith

Wednesday, December 9, 2020 at 9:36pm EST

I want to get my first car this winter. It is good to know that I will want to consider looking into different types of car insurance. It does seem like Is should get an expert to help me choose a good insurance policy.

Ivy Baker

Wednesday, January 27, 2021 at 12:43am EST

I want to get my first car this winter. Thanks for explaining that I will want to consider looking into liability protection. It does seem like a good thing to get an expert to help me know how much coverage I should get. It seems like I should get a little extra since I don’t have a lot of driving experience.

Sidra Bashir

Thursday, April 15, 2021 at 2:49am EDT

Hi, your tips related to car insurance is very helpful for me and other. These tips are very useful. keep sharing and posting. Best Regards, top1insure

Benjamin Franklin

Wednesday, May 26, 2021 at 10:57pm EDT

I need to open car insurance. That’s why I needed to know the types of car insurance. In your article, you described its clearly. It was very helpful to me. Thanks for sharing this article.


Monday, May 31, 2021 at 9:31pm EDT

This is a very good, interesting, and informative article.

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