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Do You Need Rental Car Insurance Coverage?

Christy Bieber
By: Christy Bieber

Our Insurance Expert

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Car insurance coverage protects against financial losses due to vehicle damage, accidents, or theft. Rental car insurance provides these same types of protection in a rented vehicle. Read on to learn more about how rental car insurance coverage works and why it's necessary.

What is rental car insurance?

Rental car insurance is a type of insurance coverage. It protects against financial losses that occur while driving a rented vehicle. A driver who rents a car could purchase auto rental insurance to cover:

  • Damage to the rented vehicle after a collision
  • Compensation for injuries to other people or property that result from crashing the rental car
  • Injuries the insured experiences due to an accident in a rental car
  • The theft of a rented vehicle
  • The theft of the policyholder's personal belongings from the rental vehicle

Not every rental car insurance policy protects against all these losses. As with traditional auto insurance, motorists have the option to choose what protection they wish to pay for.

Does your car insurance cover rental cars?

Does my car insurance cover rental cars? This is a common question.

The good news is, car insurance protections typically extend to rental cars. A driver's liability coverage and other types of coverage remain in effect even if the motorist is in a rental rather than a personal vehicle.

However, there are some exceptions. Car insurers may exclude coverage for rental vehicles rented outside of the United States. And motorists who rent a much more expensive vehicle than they own may find some losses exceed policy limits. A driver with $25,000 in collision coverage who rents a Ferrari isn't fully covered.

Types of rental car insurance coverage

There are many different types of rental car insurance coverage. Common examples of rental car insurance include the following.

Supplemental liability protection

Supplemental liability protection is a type of rental car liability insurance. It protects the policyholder against claims other drivers make. If a driver of a rented vehicle causes a crash that injures others or damages their property, a supplemental liability policy will pay. It covers the victim's losses, up to policy limits.

Collision damage waiver

A collision damage waiver (CDW) isn't a traditional form of insurance. Instead, it's unique to rental car insurance policies.

When a renter pays for an optional CDW, the rental company agrees not to try to collect money from the renter to pay for vehicle damages in the event of a crash.

Personal effects coverage

Personal effects coverage is a type of rental car insurance coverage that protects the policyholder's belongings. It provides coverage, up to policy limits, for items in the rental vehicle. For example, a driver whose laptop is stolen from a rental vehicle could make a claim for compensation.

Other immediate family members and passengers traveling with the insured driver are also protected.

Personal accident insurance

Personal accident insurance covers medical costs incurred by the policyholder. It can also cover medical costs for any other people in the rented car at the time an accident happens. A motorist driving a rented car who was injured in an accident would have the ambulance ride and medical bills covered by this policy.

Do you need rental car insurance?

In many cases, a driver's standard auto insurance covers everything that a rental car insurance policy would offer. For example:

  • Comprehensive and collision coverage could make a collision damage waiver unnecessary
  • Bodily injury and property damage liability coverage could make supplementary liability coverage unnecessary
  • Homeowners or renters insurance could cover personal possessions
  • Personal injury protection (PIP) or medical payment coverage could make personal accident insurance unnecessary

However, drivers should be aware their own coverage may not be as broad as the rental car coverage in all situations. Individual policies could have lower limits or higher deductibles. Or auto insurance might exclude coverage entirely in certain circumstances. Cars rented while abroad are commonly excluded.

When answering the question, "Should I get rental car insurance?" it's critical to have read policy documents carefully to understand what coverage is in effect.

Does your credit card cover rental insurance?

In many cases, credit card rental insurance can provide some coverage for motorists renting vehicles.

This rental car insurance provided by credit card companies isn't always as broad as cardholders expect, though. Often, it only replaces the collision damage waiver. It generally provides no coverage for bodily injury or liability. And it probably doesn't cover personal property or medical care costs the cardholder would experience after an accident.

Motorists wondering, "Should I insure my rental car?" need to be aware of the limitations of credit card rental auto insurance. This means reading cardmember terms carefully.

Need a rental car? Need a credit card? See The Ascent's list of the best credit cards with rental car insurance.

Cost of rental car insurance coverage

"Does my auto insurance cover rental cars?" is a complicated question. For motorists considering purchasing rental car insurance, there's another important question: How much is rental car insurance?

The answer depends on many factors. They include the extent of rental car insurance purchased, as well as where the policy is bought from. In general, however:

  • Collision damage waivers typically cost between $20 and $30 when purchased from the rental car company but could be as low as $10 when purchased from a third-party insurer.
  • Supplemental liability insurance typically costs somewhere around $8 to $12 per day
  • Personal accident insurance and personal effects coverage are generally around $2 to $3 per policy per day.

Which companies offer cheap rental car coverage?

For many people, standard auto insurance policies include rental car coverage without any additional cost. Motorists can research the best cheap auto insurance options to find an affordable policy offering this feature.

It's also possible to purchase standalone rental car insurance. Policies can be obtained from a variety of companies including:

Each provides affordable protection. But the specific costs and coverages vary by provider. It's best for motorists to get a personalized quote for rental car insurance coverage.

Alternatives to rental car insurance at the counter

It's possible to buy rental car insurance at the counter when renting a vehicle. However, other options for rental car insurance coverage may be more affordable or more comprehensive. Other options include:

  • Purchasing car insurance with good rental car coverage. Motorists can compare options to determine the best company for auto insurance. Look at which policies come with affordable premiums and comprehensive coverage for rental vehicles.
  • Credit card rental car insurance. While credit card policies often aren't comprehensive, they can reduce the coverage motorists need to buy at the counter.
  • Third-party rental car insurance providers. Companies such as Insure My Rental Car and Allianz can provide more affordable coverage in many cases.


  • Drivers are generally legally responsible for damage to rental cars. Renters can sign up for a collision damage waiver (CDW) when renting a vehicle. This waiver ensures the rental car company will not try to collect in the event of damage. With no insurer and no CDW, motorists would be expected to cover the costs.

  • In some cases, buying rental car insurance is important to protect against loss. For example, drivers may want to buy supplemental liability coverage. That can ensure they don't end up paying out of pocket for damages to victims if they cause a crash.

    However, not every person renting a car should buy rental car insurance coverage. In some cases, regular auto insurance policies will provide sufficient protection. In other situations, credit card rental car insurance could provide protection.

    Motorists should review their insurance policy terms carefully before renting a car. If existing insurance offers sufficient protection, additional rental car insurance isn't needed.

  • Third-party rental car insurance is rental car coverage provided by an independent company. It's an alternative to buying rental car insurance directly from the car rental provider. It can sometimes provide more comprehensive coverage at a lesser cost.

  • Rental car reimbursement coverage is different from rental car insurance. Rental car insurance coverage provides protection from loss when renting a vehicle. Rental car reimbursement coverage reimburses motorists for the cost of renting a vehicle when their own car is damaged by a covered cause. Motorists who want their insurer to pay for a rental car while theirs is being fixed after an accident will need rental car reimbursement coverage.

  • It is possible for drivers who do not have auto insurance policies to rent vehicles. However, drivers without standard auto coverage will want to make sure they get appropriate protection in place. Otherwise, they could face serious out-of-pocket losses in the event of an accident or the theft of the rental vehicle.

Our Insurance Expert