Does My Car Insurance Cover My Rental Car?

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Written by Guest | Last Updated December 20th, 2019
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Guest Post by Ethan Lichtenberg

Renting a car can be simple. But when it comes to the rental car insurance, that’s when it gets complicated. Most people have their own car insurance, which covers liability in the U.S. and other countries. But if you have cut-rate car insurance, you need to be careful. Car insurance is more affordable than ever, but if you aren’t covered, some companies will leave you paying thousands out of your pocket if you get in an accident. So, how do you know if your auto insurance covers rental car insurance?

Do I need the rental company’s insurance?

This is the number one question when it comes to insuring a rental car. When you get to the checkout, whether you’re on a business trip or vacation, rental companies always want you to buy their insurance. (Check out our best tips for business trip rental cars here).

Before you go wasting money, check with your insurance company. Most of the time, you will have coverage and can decline the rental company’s offers. Before you do that, you will need proof of insurance, which often must be in paper form. You can get this from your insurance company, and if you need a form for travel out of the country, its usually just a phone call away.

Most rental companies also refer to the type of car you plan on renting. Just like personal auto insurance, coverage on an SUV will be more expensive than a standard coupe. Check out this list of the best car brands to use for the safest rental ride.

Car keys in someone's hand

What does rental insurance include?

To truly know if your insurance covers your rental car, you should know what rental insurance covers. Most rental companies will include liability, personal accident insurance, collision damage waiver, and personal effects coverage in their list of options for you to purchase. They recommend you buy all of them, but this would be your biggest mistake. Once again, check with your car insurance company and decline all the offers the rental company gives you.

Liability coverage

Liability coverage is the primary insurance that all policies contain. It is the coverage of other drivers’ expenses if you cause an accident. It’s important to note that liability coverage is for other drivers and not yourself. So remember that in almost every case, you will not need liability insurance for your rental car.

Personal accident insurance

Personal accident insurance would cover your medical bills if you were to get in an accident in a rental car. You probably already have this coverage through your car insurance as well. More often than not, you will decline it also. As long as you have personal injury protection (PIP) on your car insurance policy, you do not need this offer from the rental company.

Car Crash with damaged front bumper

Collision damage waiver (CDW)

A collision damage waiver is a coverage that most rental companies will try to push down your throat until you buy it. CDWs are not necessarily car insurance. They are agreements that, in the case of theft or damage not caused by you, you are not responsible, the rental company is. This can be important to have, but if you have personal auto insurance, you may already have collision coverage.

Personal effects coverage

Personal effects coverage is usually the most apparent insurance policy rental companies offer you. It is coverage for when any of your personal belongings are stolen or damaged. You can decline this offer in every situation unless you are worried something may happen. It is usually not too costly.

Which rental car company offers the best insurance?

Most rental companies claim to offer the best auto insurance rates than any other company. You know the most popular companies: Enterprise, Hertz, Budget. The truth is, most are generally the same, but some companies are better than others. Do your shopping before your buying. Some companies are better than others. If you have no idea what your car insurance covers and doesn’t cover (like me), call your company and they can explain it to you in length in the simplest way possible.

Driving with hands on the steering wheel

The bottom line

Renting a car is almost always a pain, but knowing what you need and don’t need for insurance will be an enormous help to you and the rental car company. My advice, in most cases, is that you can decline everything. The minimum coverage in most U.S. states will also cover you when you’re in a rental car.

Still, sometimes, more coverage is worth the money. I would recommend the longer you’re going to be using a rental, then more coverage is better. If you rent a car for months in a foreign place, the chances an accident or theft occurs increases exponentially. Be careful out there, and happy traveling!

Ethan Lichtenberg is a writer for CarInsurance101.com and other top car insurance comparison sites. He enjoys reading Fredrik Backman and sneaking off to the beach every chance he gets.

The Top Rental Cars Companies

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#1 Enterprise chevron_right
9.0 Overall Score
4
starstarstarstarstar_border
(169)
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#2 Hertz chevron_right
8.4 Overall Score
3.9
starstarstarstar_halfstar_border
(101)
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#3 Sixt Rent A Car chevron_right
8.2 Overall Score
1.3
starstar_halfstar_borderstar_borderstar_border
(189)

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