Does My Personal Auto Insurance Policy Cover Rental Cars?
Last Updated on April 16, 2023
If you have a personal auto insurance policy, then that policy could cover rental cars.
If you have full coverage car insurance (which includes collision and comprehensive coverage), then your insurance policy should extend to cover any rental car. However, if you only carry minimum liability insurance, then your personal auto insurance policy may not cover rental cars.
Keep reading to discover everything you need to know about how personal auto insurance policies cover rental cars.
Table of Contents:
- How Personal Auto Insurance Policies Cover Rental Cars
- Do I Need to Buy the Rental Car Company’s Insurance?
- What Does Rental Car Insurance Cover?
- Rental Car Insurance You May Already Have
- Rental Car Insurance You May Need
- Does My Credit Card Cover Rental Cars?
- Contact Your Insurer to Verify Rental Car Coverage
- How Rental Reimbursement Coverage Works
How Personal Auto Insurance Policies Cover Rental Cars
If you have a personal car insurance policy, then your personal car insurance policy should cover you when driving a rental car.
Your personal car insurance policy should provide similar coverage on rental cars as it does on your personal vehicle.
If you have liability insurance on your personal auto insurance policy, for example, then that liability insurance should extend to rental vehicles. If you have collision and comprehensive coverage (both parts of full coverage car insurance), then you should have collision and comprehensive coverage on your rental vehicle.
Typically, your personal auto insurance policy will provide the following coverages:
Liability Insurance: Your car insurance policy includes property damage and bodily injury liability coverage, which covers any damage you cause to other property and people. Most states require you to carry a certain minimum amount of each type of liability coverage. When you rent a vehicle, your personal car insurance company should include liability coverage.
Collision Coverage: Most personal auto insurance policies also extend collision coverage to rental vehicles. Collision coverage is optional, but it covers damage to your own vehicle after an accident. If you collide with another vehicle and cause $5,000 of damage to your own vehicle, for example, then you can make a claim through your collision coverage. You pay a deductible, and your insurer covers all remaining costs.
Comprehensive Coverage: Comprehensive coverage covers damage to your vehicle that occurs outside of accidents, including fire damage, flood damage, hailstorm damage, theft, vandalism, and other types of damages.
Any Other Minimum Required Car Insurance Coverages: Your car insurance policy should rise, if necessary, to meet any minimum required car insurance coverage options in your rental area. Some states require personal injury protection (PIP), medical payments coverage, or uninsured motorist insurance, for example. Your personal auto insurance policy should rise to include all these minimum required car insurance coverage options when renting a vehicle.
Some car insurance companies require you to have full coverage car insurance to extend coverage to rental cars. Others provide rental car coverage even if you only have minimum liability insurance. If unsure, check your policy or contact your insurer to verify coverage.
Do I Need to Buy the Rental Car Company’s Insurance?
When you rent a vehicle, the rental car company could surprise you with many car insurance options and choices. Alamo, Avis, Dollar, Hertz, Enterprise, Budget, Sixt, Thrifty, and other rental car companies all have multiple coverage packages to choose from. Do you need to buy any of this coverage? Or can you safely skip it?
The answer to this question depends on your personal coverage and aversion to risk.
If you have full coverage car insurance in the United States, then that full coverage car insurance should extend to cover your rental car. That means your ordinary car insurance policy will reimburse you for any damage to the rental vehicle.
However, your personal auto insurance policy does not cover everything related to the rental car. It does not cover theft or damage of personal possessions, for example, and it may not cover loss of use. Even if your personal auto insurance policy covers the main damages to the vehicle, you could pay hundreds extra in additional fees.
In this situation, you can either:
- Buy the collision damage waiver (CDW) from the rental car company
- Buy other specialized insurance products from the rental car company (like personal possessions coverage)
- Rent the car using a credit card, which means your credit card extends coverage to the rental vehicle
- Use other types of insurance to cover the rental car
What Does Rental Car Insurance Cover?
When you rent a vehicle, the rental car company will provide several insurance options. These options make it predictable and easy to rent a vehicle. You can see the exact coverage options and how they work.
Car insurance from the rental car company typically includes:
- Liability coverage
- Personal accident insurance
- Collision damage waiver (CDW) or loss damage waiver (LDW)
- Coverage for personal effects
Rental Car Insurance You May Already Have
Most car insurance policies will cover your own vehicle as well as a rental vehicle. This is true for most major auto insurance companies in the United States, including GEICO, State Farm, Allstate, Farmers, Nationwide, Liberty Mutual, USAA, and Progressive.
If you have personal auto insurance, then there are several overlaps between the rental car company’s insurance policy and your own personal policy.
In this situation, you already have the following:
- Liability insurance
- Personal accident insurance
All personal car insurance policies come with liability insurance. It’s the foundation of any car insurance policy. If you have a personal auto insurance policy that extends to rental cars, then you do not need to buy additional liability insurance from the rental car company.
Personal accident insurance covers certain medical bills after an accident. If you have personal injury protection (PIP) or medical payments coverage on your auto insurance policy, then you should already be covered.
Similarly, if you have health insurance, then you may not need personal accident insurance from the rental car company. You are already insured against injuries and medical bills via health insurance.
Rental Car Insurance You May Need
Depending on your budget and aversion to risk, you may want to consider buying the following coverage from the rental car company:
Collision Damage Waiver or Loss Damage Waiver: The collision damage waiver (CDW) or loss damage waiver (LDW) transfers financial responsibility from you to the rental car company in case of damage or theft. If you buy the CDW from the rental car company, then damage the rental car, then you pay nothing. The CDW also covers loss of use.
Personal Effects Coverage: Ordinary car insurance does not cover personal items within your vehicle. If someone breaks into your rental car and steals your luggage, purse, phone, GPS, or anything else inside your vehicle, then you cannot make a claim through auto insurance. That’s why some rental car companies provide extra personal effects coverage. However, if you have homeowners, renters, or condo insurance, then your policy should include personal effects coverage, in which case you can decline this coverage.
Does My Credit Card Cover Rental Cars?
Most Visa, American Express, and Mastercard credit cards cover rental cars. If you rent the car and pay for it using your card from one of these companies, then your credit card should provide secondary coverage for your rental period.
Check your credit card documents to verify rental car coverage. Credit cards have different rules, restrictions, and limits for rental car coverage.
If your credit card covers rental cars, then you should be able to safely decline any insurance from your rental car company. In this situation, you are covered by your personal auto insurance policy (as the primary coverage) and your credit card (as the secondary coverage), leaving a few gaps in your insurance.
Contact Your Insurer to Verify Rental Car Coverage
Not all insurers cover rental cars in the same way.
Some insurers require you to have a full coverage car insurance policy before they cover rental cars, for example. Others extend rental car insurance even if you only have a minimum liability policy.
Some insurers also have different coverage options. Some cover rental cars for 15 days, for example, while others cover rental cars for 31 days.
Before renting a vehicle, contact your insurer to verify you have valid car insurance to cover you for the duration of the car rental.
How Rental Reimbursement Coverage Works
Rental reimbursement coverage is different from ordinary car insurance. Rental reimbursement coverage covers the cost of the rental car itself – not any damage to the rental car or damages you cause while driving the rental car.
Let’s say you damage your main vehicle in an accident. Your main vehicle needs to be repaired for two weeks at the shop. During this time, you can rent a vehicle for your daily driving needs. If you have rental reimbursement coverage, then your insurer will cover the cost of renting the vehicle. If not, then you need to pay for this rental car out of pocket.
Some insurers include rental reimbursement coverage with all policies. Others add it to policies in exchange for a few dollars per month. Check your policy to determine if you have rental reimbursement coverage.
Final Word on Rental Car Insurance from Your Personal Auto Policy
Your personal auto insurance policy should cover you when renting a vehicle. Any personal auto insurance coverages you have should carry to your rental vehicle, including liability, collision, and comprehensive coverage.
Plus, if you rent the vehicle using your credit card, then you could have additional insurance through your credit card. That means you could safely decline the car rental company’s insurance options.
However, coverages vary widely between insurance companies and credit cards. Contact your insurer and check policy documentation to verify you are covered when renting a vehicle.