Does My Auto Insurance Policy Cover Rental Cars?

Last Updated on September 4, 2020

If you’ve recently rented a car, then you were probably asked if you wanted rental car insurance.

Some people say it’s a cash grab by the car rental company. Your car rental company, on the other hand, tells you it’s a smart idea. What’s the truth? Does your current auto insurance policy cover rental cars? What happens if you get into a collision with or without rental car insurance? Today, we’re explaining everything you need to know about insurance coverage when renting a car.

How to Check If Your Car Insurance Covers Rental Cars

Most car insurance policies will cover your own vehicle as well as a rental insurance policy rental car coverage

In fact, you’ll receive identical coverage on your rental car as you would on your normal vehicle. You’ll typically have the same limits and deductibles.

The only exception is if you’re renting a car for non-personal use. If it’s a commercial or business rental, then your personal car insurance coverage may not apply.

Not all insurance policies include rental car insurance. Call your insurance company to find out if you’ll be covered.

It’s also important to note that you might not be covered for extended periods of time. If you’re renting a car for more than 30 days, for example, then you might need to pay for supplemental coverage. Many auto insurance policies only cover rental car insurance for 30 days.

Check with Your Credit Card Company

Even if you’re not covered under your existing car insurance, you may be covered under your credit card. If you’re paying for your rental car using a credit card, then you might have additional car coverage.

To determine your coverage, read through your credit card policy or call the number on the back of your card. Your credit card might provide coverage above and beyond your existing car insurance policy.

Types of Insurance Offered by Your Rental Car Company

Rental car companies are notorious for upselling you on various insurance options. It’s easy to get confused by the different options available. Car rental companies often take advantage of this confusion. That’s why it’s important to know your options before you get to the counter.

Rental car companies will typically offer four coverage options at the counter, including:

Loss Damage Waivers ($10 to $20 Per Day): Also known as a collision damage waiver, this insurance waives financial responsibility if the rental car is damaged or stolen. It also covers loss-of-use charges if your rental car is in the shop, towing fees, and other expenses.

Liability Coverage ($8 to $15 Per Day): Liability coverage is the basic insurance required by the state. It protects you from potential lawsuits and covers damages you inflict on other drivers or property with the rental vehicle.

Personal Accident Insurance ($1 to $5 Per Day): This covers your medical costs after an accident.

Personal Effects Coverage ($1 to $5 Per Day): This covers anything you keep in your rental car, up to a certain amount of value.

You can typically decline the last three insurance policy options – assuming you have good auto insurance, health insurance, and renters or home insurance.

Your basic liability car insurance will cover you in the event that you cause injury or property damage when driving a rental car. Liability insurance is the most basic possible car insurance you can have while still legally driving on roads.

Meanwhile, your comprehensive and collision coverage – both of which are optional car insurance policies – will protect against damage to the rental car itself. If you don’t have collision or comprehensive coverage – say, if you have a cheap, legal minimum car insurance plan – then you may want to get the loss-of-use waiver (the first one on the list above).

If you have a decent health insurance plan, then the personal accident insurance offered by your rental car company is likely unnecessary. Health insurance will cover accident-related injuries.

Meanwhile, if you have renters or homeowners’ insurance, then the possessions in your rental car will already be insured – assuming your policy has off-premises coverage.


Ultimately, most car insurance policies cover rental cars. Your terms, conditions, limits, and deductibles should all carry over to your rental car. If you have liability, collision, and comprehensive coverage on your main car, then you should have equal coverage on your rental car.

Additionally, you should get some additional coverage when paying for your vehicle with a credit card. Many credit cards offer basic insurance for rental cars.

For all of these reasons, many people can safely decline all supplementary insurance options offered by the car rental company. However, talk to your car insurance provider to make sure you’re covered while driving a rental car.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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