Does Your Car Insurance Cover You When Driving a Rental Car?

An existing car insurance policy will typically cover you when driving a rental car, but limitations exist for business expenses and more. Some circumstances make it worthwhile to buy additional insurance coverage at the rental car counter, though this depends on your current policy, how you’re using the rental vehicle, and other factors.

Here’s what you should know if you’re considering whether you need to buy additional rental car insurance.

How your personal car insurance can cover a rental car

Your personal car insurance policy usually covers rental cars.

If your car insurance policy includes liability, comprehensive, and collision coverage, you can typically expect those coverages to extend to any rental car you operate. In the event of an accident while driving the rental vehicle, your insurance policy should cover the costs of repairs, medical bills, and property damage costs up to the policy’s limits (minus any deductible).^[1]

To ensure your personal items are protected while in a rental vehicle, you may also need homeowners or renters insurance. If you don’t have these policies — or they don’t include this coverage for personal items — consider adding an insurance rider to protect against theft.

How to check if your insurance covers a rental car

To see if your car insurance policy specifically covers rental cars, read your policy documents that you may have stowed away at home or check online if your insurer offers online account management. You can also call your insurance agent or a representative of your insurance company. Just check your insurance card for a number to call.

If your policy does cover rental cars, make sure you have enough coverage for the type of vehicle you’re renting. If, for example, your personal policy covers a 2005 Ford Focus and you’re renting a brand new Corvette, your current coverage may not be enough to pay for the potential damages to the more expensive vehicle.

Rental car reimbursement vs. rental car insurance

Rental car insurance differs from rental reimbursement coverage — the latter of which is an add-on coverage. For an extra fee, your car insurance company will cover the costs of a rental car while your primary vehicle is in the shop for repairs.

The cost for this coverage is typically “nominal,” according to the Insurance Information Institute, so if you rely on your car for work or vital transportation, consider adding it to your policy.^[2]

See Also: Temporary Car Insurance Buying Guide

Rental car insurance: What to know and how it works

Rental car insurance is different from personal car insurance. Unlike your personal policy, which covers you for an extended period of time, rental car insurance is temporary, only covering you and the vehicle for the specific days you pay for.

Rental companies offer rental car coverage options directly to consumers. You’ll typically be asked if you want to add this coverage while at the checkout counter when picking up your vehicle.

Rental car insurance comes in several forms, including:

• Personal accident insurance: This coverage pays for the medical and ambulance bills for any injuries you or your passengers suffer during an accident while in the rental vehicle.

• Liability coverage: If you’re in a wreck in the rental car, liability coverage extends to the medical bills, car repairs, and property damage of other people, like drivers and pedestrians.

• Loss/collision damage waiver: Though not technically insurance, this waives your financial responsibility if the car your rent is damaged or stolen.

• Personal effects coverage: This covers your belongings if they’re stolen from your rental vehicle. A renters or home insurance policy will sometimes cover personal belongings separately, and you also may be able to purchase a rider to cover them.

Learn More: What Does a Renters Insurance Policy Cover?

What rental car insurance covers

Rental car insurance can cover damage to the vehicle you’re driving, medical bills if you or a passenger is hurt, and the cost of replacing your computer, camera, or suitcase if they’re stolen out of your vehicle. Rental car insurance also covers a totaled vehicle, up to a certain point.

With the purchase of a loss damage waiver, rental car coverage can keep you from paying a loss of use fee, which can be charged if your rental vehicle needs repairs or is removed from the rental company’s fleet. If the policy includes liability coverage, it extends to the other cars and people involved in an accident.

What won’t rental car insurance coverage cover? The insurance could become void if you break any laws — like speeding or driving while intoxicated — so make sure you follow the rules of the road.

Cost of rental car insurance

The exact cost of rental car insurance varies by provider, vehicle, location, coverage type, and other details. The District of Columbia Department of Insurance, Securities & Banking (DISB)^[3] provides a good estimate of what Washington, D.C., residents — and Americans, more generally — can expect to pay per coverage type:

• Personal accident: $1 to $5 per rental day

• Liability: $7 to $14 per rental day

• Loss damage waiver: $10 to $20 per rental day

• Personal effects: $2 to $5

With these numbers, you’d pay somewhere between $140 and $308 for full-coverage insurance on a weeklong car rental.

Learn More: Rental Car Insurance: Do You Need It?

Pros and Cons

Purchasing rental car insurance provides you an extra layer of protection when renting a vehicle, though it has some drawbacks. Weigh the following pros and cons if you’re considering rental car insurance for your next trip.

When should you buy rental car insurance?

Rental car insurance can be useful for some, but it’s not right for everyone or for every scenario. Here’s when purchasing rental car insurance may be smart:

Your personal insurance isn’t enough (or you don’t have it at all)

If you don’t have a personal auto insurance policy, or your current coverage won’t protect you or the vehicle you’re driving, you may want additional rental car insurance. You can also look into adding riders to your existing policy to better protect yourself.

You don’t have coverage through a credit card

Many credit cards offer rental car coverage, so check your agreement or call your credit card company if you or your spouse has any cards to your name. Remember that you’ll need to use that credit card to book and pay for your rental car in order for coverage to apply.

You need certain optional coverages

If there are specific coverages you want — like personal belongings coverage for a nice camera or piece of jewelry you’re bringing on your trip — adding coverage through your rental car company can help. Another option to explore is adding a valuable belongings floater to your homeowners or renters policy.

You’re traveling on business

Your personal auto insurance policy will usually only apply if you’re traveling recreationally. If you’re renting the car on business, you may need extra coverage to be protected.

You’re traveling outside the country

Similarly, your personal policy only covers you in the country it was issued in. You’ll typically need additional rental car coverage when traveling abroad.

You have a high deductible

If you rely on your personal policy, you’ll need to pay the policy deductible if you get in an accident with a rental vehicle — even if rental car coverage is included. Most temporary rental car insurance policies, on the other hand, don’t have deductibles.

Rental car insurance FAQs

Find answers to these commonly asked questions about rental car insurance for further guidance.