Do I Need Rental Car Insurance?
Time for the exciting vacation you’ve planned for months. You arrive at your destination and head to the rental counter to pick up your car. The representative asks, “Do you want the insurance?” Here’s the better question: Do you need insurance for a rental car?
As with your own car, you want to make sure you can cover repairs to the rental car or other people’s property, as well as liability and medical bills, if you have an accident. Most auto insurance policies already include coverage for a rental car. So do many credit cards. Check with your insurer and credit card company before you reserve a vehicle to avoid paying extra when you don’t have to.
What is rental car insurance?
What the rental car company offers isn’t actually insurance. Basically, it’s an add-on giving you coverage if you have an accident while driving one of its vehicles. This usually includes:
- Liability − Damage you cause to other vehicles, property or people
- Collision − Damage you cause to the rental vehicle
- Personal effects − Your belongings, like clothing and luggage, stolen from the vehicle or lost when the vehicle itself is stolen
- Personal accident − Medical bills for you or anyone else in the vehicle injured in an accident
Does my car insurance cover rental cars?
If your personal car insurance includes collision, comprehensive and liability coverage, it will likely cover you if you have an accident when driving a rental in the U.S., U.S. territories or Canada. The policy would pay up to your normal policy limits and with your regular deductible.1
Keep in mind, this isn’t the same as rental car reimbursement coverage. That’s an option in your personal auto policy that pays for renting a car while yours is being repaired after an accident.
While every insurance company has its own criteria for insuring rental cars, they do commonly exclude some things:
- International travel − Most insurers don’t cover rental cars outside the U.S. However, you can buy specialty rental car or travel insurance to meet another country’s insurance requirements.
- Business use − Many personal insurance policies don’t cover vehicles rented for business reasons.
- Loss of use − When a rental is out of service for repairs, some car companies charge for the time it can’t be used. If your auto insurance doesn’t cover these fees, you may be responsible for the cost.
To be absolutely certain, and to make sure you understand any restrictions that apply specifically to renting a car, check the details with your insurance company before you rent.
Does my credit card have rental car coverage?
Credit cards often provide coverage for rental cars if you use the card to pay and the rental’s in your name. This can be a particularly useful option in places where your personal auto insurance won’t cover you. Plan ahead. Call the credit card company for a detailed explanation of your options.
Here’s how this protection generally works:
- It’s usually secondary to other insurance, meaning it will kick in only after you exhaust other coverage. Insurance through your credit card pays first only if you have no other coverage.
- Most credit card policies require you to decline the rental company’s damage waiver, which covers damage to the rental only, not to other people’s property. Be sure to avoid accidentally canceling your credit card’s coverage with a less comprehensive damage waiver.
- The coverage applies only to short-term rentals, and sometimes the limit is as short as 15 days.
- While coverage applies when you travel outside of the U.S., certain countries are excluded. Credit card coverage may also exclude certain vehicles, like trucks or vans.2
Just as with your personal auto policy, you may have to pay the car company for loss of use if your credit card doesn’t cover these charges.2
What other car rental insurance options do I have?
- Homeowners and renters policies usually cover personal possessions when they’re outside the home, including items stolen from a rental car. There are often limitations with high-end electronic equipment and cameras.
- If you’re already buying travel insurance, this may provide enough medical and personal effects coverage. Just make sure you don’t duplicate your rental car insurance.
- Nonowner car insurance provides coverage for people who don’t own a car but drive regularly using rentals, car-sharing services or borrowed vehicles. It usually provides the same level of protection as a standard car insurance policy, covering you for:
- Injuries to other drivers in an accident you cause
- Property damage, excluding damage to the vehicle you’re driving
- Accidents caused by uninsured/underinsured motorists
- Medical bills resulting from accidents1,3
What’s the bottom line?
You may not need to buy the rental car company’s insurance if:
- You’re traveling within the U.S. or Canada and your own auto policy provides enough coverage.
- Your credit card offers rental car insurance.
- You’ve bought standalone coverage through a separate company.
Rental car insurance may be a good idea if:
- You want to avoid having to pay a deductible or higher rates on your own auto policy if you damage a rental car.
- You don’t have your own insurance or coverage through a credit card.
- You’re traveling where your personal auto policy won’t cover you.
Still unsure whether you have enough coverage for your rental? Call an Amica auto insurance representative at 833-513-3881 to discuss what protection you may need during your upcoming adventure.
1 Coverage may vary by state and policy.
2 Rental Car Insurance: Key Things to Know in 2022, WalletHub, February 2022.
3 Nonowner Car Insurance, WalletHub, March 2022.