Rental Car Insurance – What’s Covered?


You book your car rental online, pick up the keys, and hop in and hit the road. But, then you wonder, “Does my car insurance cover rental cars?”

If you’ve ever rented a car, then you’ve probably been tripped up by the final question the clerk asks you before they hand over the keys: “Would you like to purchase supplemental insurance coverage?” Most folks are unsure how to answer this question, wondering to themselves, “Does my car insurance cover rental cars?” Without knowing for certain, folks often just agree because they’d rather be safe than sorry. In their defense, it is a hard question to know how to answer. 

There are a lot of factors to consider regarding rental car insurance coverage. The easiest way to be prepared is to do your research ahead of time, learning about what to expect, having a clear understanding of car insurance, and knowing your personal car insurance policy. 

With the help of Travelers Insurance, here are 5 questions you should always consider when deciding if it’s worth the extra money for rental car coverage: 

Does My Car Insurance Cover Rental Cars?

The first factor that should influence your decision is your existing car insurance coverage. Take the time to review your coverage. What sort of comprehensive, collision, and liability coverage do you have? Does it extend to rental cars you may drive? In many cases, your existing policy will cover rental vehicles — at least to some extent. If you aren’t sure if your car insurance policy covers rentals, check with your agent or insurance representative.

Do I Need the Auto Coverage Offered by the Rental Agency?

You’ll need to look at the types of coverage the rental car company is offering and requires. Is it coverage that your existing policy doesn’t provide, or does it overlap with your personal insurance in most areas?

Rental car agencies typically offer extra coverage for the following options:

  1. Liability coverage to help protect you if someone is injured or there is property damage as a result of an accident that’s your fault. There’s a good chance your existing policy covers this already. Check your policy to determine if you could benefit from supplemental liability protection from the rental car company.
  2. Personal accident insurance to help pay you and your passengers’ medical bills if you’re injured in a rental car accident. Your existing policy and personal health insurance may provide coverage comparable to what the rental company is offering.
  3. Personal effects coverage may help cover your personal belongings, such as a cellphone or clothing, if they’re stolen from your rental car. If you have renters or homeowners insurance, these items may already be protected.

Car rental companies also offer non-insurance products called waivers. Collision damage and loss damage waivers aim to waive certain fees and expenses if the rental car is stolen or in a collision. These waivers are only effective if you’re not violating any laws (such as speeding, driving while intoxicated, etc.) when the incident occurs.

Does the Type of Car I Rent Matter for Insurance Coverage?

It’s also important to consider the type of vehicle you’re renting and, perhaps more importantly, how similar it is to the cars you already have insured on your personal policy. If you’re renting a car that’s around the same in size, price and general safety features, there’s a good chance your existing policy will provide adequate coverage on the rental. If, on the other hand, you’re opting for a more expensive or atypical ride (say a speedy sports car or pricey luxury convertible), then your personal policy may not be sufficient.

If you’re renting a car through a membership-based car sharing service, the insurance costs are typically included in the fee. However, if the car is involved in a collision or is stolen, the renter may be billed for a specific dollar amount that is stated in the membership agreement. For an additional cost, customers can purchase a ‘waiver’ to avoid paying the accident fee.

How Much Is Rental Car Insurance?

Your finances should also play a role in your decision. Because additional rental car insurance adds to your expense, it can impact your budget — especially if you’ll have the car for some time. Loss waivers can add even more costs to your bottom line.

Before deciding whether to purchase extra coverage or not, determine your rental car budget. If you’re on vacation or are in the process of repairing your personal vehicle, you might also have other budgetary concerns to factor in. Remember to consider the cost of possible damage to the rental (or a full-on wreck), and how it could impact your finances.

Do I Really Need Extra Rental Car Insurance?

Another big consideration should be how long you’ll have the car for and where you’ll be taking it. Just need the vehicle for a few hours’ trip to and from the airport? Driving it cross-country for a two-week trip?  Consider the situation for which you’re renting the car and weigh the circumstances to come to a decision on buying rental car insurance.

You also may want to check the limits on your personal insurance policy. Some only extend to rental vehicles for a certain amount of time. If you’ll have the car longer than that, supplemental coverage may be necessary.

Talk To Your Agent

At the end of the day, it’s always recommended to make a quick call to your insurance agent. They can give you a quick recap of your coverage as well as make recommendations for additional rental coverage. They may even be able to add an endorsement to your current policy that expands your rental coverage for a small fee. 

Here at The Feltner Group, we love helping our clients get the best coverage for their specific needs. When it comes time for your next rental, reach out to see how we can help.