Do I Need Rental Car Insurance?

As with your own car, you’ll want to make sure you have protection for damage, liability and medical costs if you have an accident in a rental vehicle. In many cases, your existing car insurance policy extends to a rental car, and some credit cards may offer additional protection.

That means the answer to questions like “Does my car insurance cover rental cars?” or “Should I get rental car insurance?” is often yes — but not always, and not in every situation.

Quick takeaway: You may not need to buy every coverage the rental company offers. Before you rent, check your personal auto policy, your credit card benefits and any travel-related restrictions so you can avoid paying for duplicate protection.

What is rental car insurance?

Rental car insurance is a set of optional protections offered by rental companies to cover damage, theft or liability while you're driving a rental vehicle. What the rental car company offers usually isn’t traditional auto insurance in the same way your personal policy works. Instead, it’s generally a package of optional protections you can buy at the counter when you pick up the vehicle. These options usually include:

• Liability — Damage to other vehicles, property or people
• Collision — Damage to the rental vehicle
• Personal property — Stolen belongings inside the rental vehicle
• Personal accident — Medical expenses for those in the rental vehicle

At the rental counter, you may also hear terms like collision damage waiver or loss damage waiver. These may limit what you owe the rental company if the car is damaged or stolen, but terms vary by company.

Also keep in mind that this isn’t the same as rental car reimbursement coverage, which is an optional coverage on your personal auto policy that can help pay for a rental while your own vehicle is being repaired after a covered loss.

Does my car insurance cover rental cars?

If your personal car insurance includes liability, collision and comprehensive coverage, those protections will often extend to a rental car. In general, your policy would apply up to your normal limits and subject to your regular deductible.¹

That’s why the answer to “Can I use my insurance on a rental car?” is often yes. But it’s important to understand exactly which parts of your policy may extend to the rental.

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. or Canada. 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.

Also keep in mind that this isn’t the same as rental car reimbursement coverage, which is an optional coverage on your personal auto policy that can help pay for a rental while your own vehicle is being repaired after a covered loss.

To be absolutely certain, and to understand any state-specific or policy-specific restrictions, check the details with your insurer before you rent.

Rental car insurance vs. rental reimbursement

These two coverages are easy to mix up, but they’re designed for very different situations.

For more on that distinction, see Car Rental Reimbursement Coverage.

Do you need insurance to rent a car?

Yes, there needs to be some form of coverage in place when you rent a car, but that doesn’t always mean you need to buy the rental company’s protection. In many situations, your personal auto insurance, a credit card benefit or another policy may already provide some coverage.

If you don’t have personal auto insurance, or if you’re traveling somewhere your policy doesn’t apply, the rental company’s protection may be more important. This is often the real issue behind the question “Do you need insurance to rent a car?” — not whether coverage exists, but where that coverage is coming from.

Does my credit card cover insurance on a rental car?

Credit cards often provide some rental car coverage if you use the card to pay for the rental and the rental agreement is in your name. This can be especially useful in situations where your personal auto insurance doesn’t apply. But benefits vary widely, so it’s worth checking with the credit card company before your trip for a detailed explanation of what’s included.

Here’s how this protection generally works:

• It’s often secondary coverage — In many cases, the benefit applies only after other insurance has been used. Some cards may provide primary coverage instead.
• You may need to decline the rental company’s damage waiver — Accepting the waiver could affect your credit card benefit.
• Coverage is usually limited to short-term rentals — Maximum rental periods may vary by card.
• Some vehicles and countries may be excluded — Luxury vehicles, trucks, vans, exotic cars and certain international destinations may not qualify.²
• Loss-of-use charges may not be included — You could still owe fees if the rental company charges for the time the vehicle can’t be rented while repairs are being completed.²

Before your trip, check with your credit card company to understand exactly what coverage is included and what restrictions apply.

What other rental car coverage options do I have?

Depending on your situation, other existing policies may already provide some protection while you’re driving a rental vehicle.

• Homeowners, condo and renters policies usually cover personal possessions, subject to your deductible, when they’re outside the home, including items stolen from a rental car. There are often limitations for electronics, jewelry or other high-value items.
• If you’re already buying travel insurance, it may provide enough medical or personal property coverage to reduce overlap with what the rental company offers.
• Nonowner car insurance may help if you don’t own a car but regularly drive rentals, car-sharing vehicles or borrowed cars. Depending on the policy, it may include liability coverage, uninsured/underinsured motorist protection and certain medical-related expenses.¹, ³

If you’re comparing everyday coverage choices, you may also want to review Car Insurance Coverages, What Is Collision Insurance? and What Is Comprehensive Insurance?

Should I get rental car insurance?

Should I get the rental car coverage offered by the rental car company? It often depends on what protection you already have and how much risk you want to take on yourself.

You may not need to buy the rental company’s coverage if:

• Your personal auto policy already includes liability, collision and comprehensive coverage
• You’re traveling within the U.S. or Canada and your own auto policy provides enough coverage
• Your credit card offers rental car benefits that fit your trip
• You’re comfortable using your own deductible if the rental vehicle is damaged

Rental car insurance may be worth considering if:

• You don’t have your own auto insurance
• You’re traveling where your personal policy doesn’t apply
• You want to avoid using your own policy and deductible after damage to a rental
• You want simpler, counter-based protection for peace of mind

Before you say yes at the counter, check these three things:

• Does your auto policy cover loss-of-use costs?
• Is your credit card benefit primary or secondary?
• Are you traveling outside the U.S.?

Rental car coverage checklist: See if your current policy includes liability, collision and comprehensive coverage; ask whether loss-of-use charges are covered; and confirm whether your credit card benefit is primary or secondary.

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 coverage.
• You’ve bought stand-alone coverage through a separate company.

Rental car insurance may be a good idea if:

• You want to avoid having to pay a deductible or use 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? Review your current policy before you travel, especially if you’re also comparing deductibles, liability limits or broader protection. Helpful next reads include How Much Car Insurance Do I Need? and How to Switch Car Insurance Companies. If you’d like to discuss your current protection, call an Amica auto insurance representative at 833-513-3881.