Rental Car Insurance Explained

When renting a car, salespeople often advise about purchasing rental car insurance to avoid potential consequences. It can be overwhelming trying to determine what coverage you already have in that moment. Rental companies may rely on this uncertainty to increase their sales and commissions.

It is important to distinguish between rental car insurance and rental car reimbursement coverage, as they are not the same. Rental car reimbursement coverage is a common auto policy option that covers the cost of a car rental if your vehicle is being repaired as part of a claim.

The following information will assist you in determining if you require rental car insurance and how to obtain it prior to reaching the rental counter.

Is insurance required to rent a car?

It is not always necessary to have your own auto insurance policy to rent a car. However, rental agencies often have minimal coverage on their vehicles, which could leave you responsible for hefty expenses in the event of an accident without your own car insurance.

There are various options available for obtaining insurance coverage for your rental car, such as purchasing additional insurance from the rental car company, using a credit card for coverage, or obtaining a standalone policy from a third party.

I am inquiring about the coverage of rental cars under my car insurance policy.

Auto insurance policies typically offer equivalent coverage for rental cars when used for personal purposes. This coverage may include protection for damage, theft, or total loss, as long as the rental car’s value is similar to your own vehicle. Keep in mind that your deductible will still apply if you need to file a claim with your insurance company.

Liability insurance covers injuries or property damage you are responsible for in an accident, but does not cover your own injuries or damage to your rental car.

If you do not have comprehensive or collision coverage, or if your insurer does not cover a luxury rental vehicle, you have the option to purchase a loss-damage waiver, or LDW, from the rental company. The LDW removes your financial liability for any lost or damaged rental car, as long as you follow the terms of your rental agreement.

It is important to verify with your insurance provider if your policy includes coverage for rental cars before going to the rental car office. Some personal car insurance policies may not extend coverage to rental cars.

Comparison between rental car insurance and personal auto insurance.

This article outlines the common insurance options provided by rental car companies and provides guidance on checking if your existing auto insurance policy already offers coverage.

Crashes and car theft

A loss-damage waiver, also known as a collision damage waiver, can protect you from having to pay for any damage to or theft of the rental vehicle. It is not considered insurance, but rather a waiver that states the rental car company will not hold you responsible.

Under your policy, collision and comprehensive coverage will typically extend to a rental car when renting within the U.S. or Canada. It’s important to note that you will still be responsible for your deductible, and filing a claim may result in a potential increase in your premium.

Failure to have comprehensive and collision coverage on your regular policy, or renting in a location where this coverage is not included, means you would be responsible for paying for any damage unless you purchase the LDW.

Negative consequences incurred by actions towards others.

Supplemental liability protection covers damage to others’ vehicles or property, with limits ranging from $300,000 to $1 million. It is recommended to purchase this if you do not have auto insurance or if your policy does not offer coverage in the country you are traveling to.

When driving rental cars in the U.S. and Canada, your personal liability insurance will usually provide coverage. If your auto policy has limited liability coverage, you may consider purchasing supplemental protection to increase your coverage.

Injuries to you

Personal accident insurance provides coverage for medical expenses, ambulance services, medical care, and death benefits in the event of an accident involving you and your passengers.

Individuals with personal injury protection or medical payments coverage through their auto policy may not require personal accident insurance when renting a vehicle in the U.S. or Canada. Additionally, health insurance coverage within the U.S. and travel medical insurance overseas may provide sufficient coverage.

When looking into death benefits, it may be beneficial to explore life insurance options, including obtaining quotes online.

Your stolen stuff

Personal effects coverage reimburses you for stolen belongings from the rental car, up to a specified amount.

Homeowners or renters insurance policies typically provide coverage for stolen possessions even when traveling internationally. To file a theft claim, a police report is usually required, and the deductible will apply. It’s important to note that filing a property claim may impact your insurance rates.

Utilizing your credit card for rental car insurance coverage

Credit cards typically offer rental car coverage if the rental was paid for with the card and is under the cardholder’s name, making them a convenient choice, especially for international travel where personal auto insurance may not apply.

Credit cards often include rental car insurance automatically, but it is typically secondary coverage, meaning your own auto insurance policy is the primary coverage. NerdWallet evaluated credit cards with good rental car insurance options.

Contact your credit card issuer to verify the details of your credit card coverage.

Consider purchasing rental car insurance independently.

Certain companies offer separate insurance policies for rental cars if you prefer not to purchase coverage at the rental counter. Typically, you must decline the rental company’s insurance in order to utilize these.

Allianz Global Assistance

Allianz Global Assistance offers a OneTrip Rental Car Protector for $11 per day, providing up $50,000 for damage and loss. This coverage is primary, meaning it pays out before your personal auto insurance, and includes round-the-clock emergency assistance.

Bonzah

Bonzah offers insurance starting at $21.95 per day that provides coverage of up t $35,000 for repairs or replacement of the vehicle. It is primary insurance, meaning it pays out before your own insurer. It typically covers travel abroad, but it is advisable the check the policy details.

Rental Cover

Rental Cover provides no-deductible policies that serve as primary coverage, eliminating the need to file a claim with your auto insurer first. Coverage options differ by country, and although Rental Cover does not display prices on their website, they claim to be up to 50% more affordable than the rental desk.

Sure

Sure provides rental car insurance that includes coverage for up to $100,000 in vehicle damage, personal belongings, flat tires, and lost keys. You can easily obtain a quote on their website.

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