Understanding Rental Car Insurance Coverage
Rental car insurance coverage is protection you can purchase directly from the rental car company to provide coverage while using their vehicle. It may protect you if you’re involved in an accident, theft, collision, or other covered events.
Rental car insurance can provide financial protection and peace of mind when driving a rental car and you must purchase it if you do not have a personal auto policy of your own. Understanding your personal car insurance policy, if you have one, and its coverage limits are essential to determine if you need additional rental car insurance. It's important to note that the liability coverage you purchase from a rental company may only be for the minimum liability limits required by the state in which you are renting the vehicle. If you opt to purchase the insurance coverage from your rental car company, you may be covered for less than if you defaulted to your own personal auto policy while driving the rental vehicle.
Compare your personal auto insurance policy’s coverage limits with the rental car company’s coverage limits. Consider purchasing additional rental car insurance if your auto insurance policy has limitations or exclusions.
If your personal auto insurance policy only covers you for liability coverage, you will need to purchase a collision damage waiver (CDW) from your rental car company to cover your rental car if it’s damaged or stolen.
Credit Card Rental Car Insurance Benefits
Many credit card companies offer rental car insurance benefits if you use their card to rent the vehicle. Check your credit card issuer to see if your benefits include rental car insurance. Some credit card companies will cover the comprehensive or collision deductible on a claim covered by your personal auto insurance policy, but they do not typically provide liability insurance coverage. For this, you would need to either default to your personal car insurance policy or purchase the rental car insurance from your rental car company.
Non-Owner Car Insurance
Non-owner car insurance is a liability policy for people who don’t own a car. It may provide additional protection when driving a rental car. Unfortunately, non-owner car insurance only provides liability coverage. If this is the type of personal auto policy that you have, you will still need to purchase the collision damage waiver (CDW) coverage from your rental car company, which will provide the comprehensive and collision coverages for the vehicle you are renting.
Homeowner's and Renter's Insurance
Home, condo, and renters insurance cover your personal belongings for theft, even when stolen from a rental car. Check your policy to see if it includes off-premises coverage.
Travel Insurance
Some travel insurance companies include coverage for rental cars. Check your policy to see what is covered by your travel insurance policy to avoid purchasing coverage that you don't need from your rental car company.
Car Rental Insurance Coverage FAQs
Q: Will my personal car insurance policy cover a rental car?
A: Most car insurance carriers will extend all of the coverages on your car insurance policy to a rented vehicle if you have full coverage (liability, comprehensive, and collision) on at least one of your vehicles. It is important that you check with your insurer to confirm this before declining car rental insurance with your rental company.
Q: How much liability coverage does my rental car company provide?
A: If you purchase liability coverage through your rental car company, the coverage will typically default to the minimum liability coverage required by the state you are renting the car in. This may not be enough protection for you if you are in a serious accident so consider buying a higher coverage limit or defaulting to your personal auto insurance to cover the rental car while you're driving it if your insurer will cover it.