Does Car Insurance Cover Me Driving a Rental Car?

In most cases, if you have your own car insurance policy,you likely won’t need to buy additional protection when renting from a rental car company. That said, there may be some gaps in coverage that you’ll need to fill, so it’s important to compare the types of protection rental companies offer with what's available from your insurer before renting.

Note: This guide is about using your own car insurance to protect the car you've rented at a company like Enterprise, Hertz or Avis. For the car insurance coverage that pays for a rental car while your vehicle is being repaired, see our guide on rental car reimbursement coverage. [/padding]

What does my own car insurance already cover?

Most of the common types of rental car protection are similar or identical to coverages available on a regular car insurance policy, and coverages you have for your own vehicle generally translate to rental cars as well. For example, if you have liability, collision and comprehensive insurance on your own vehicle, you will be similarly protected, up to the policy's limits, when you rent a car, and so probably won’t need to purchase those same types of coverages offered by rental companies.

In addition, most renters or homeowners insurance policies cover personal items that could be stolen from your rental. You should review your policies before deciding to purchase coverage at the rental counter.

Liability insurance supplement vs. your liability insurance

Liability insurance for bodily injury and property damage is almost always required nationwide. If you have personal car insurance, you're likely already covered. If not, car rental companies are required by law to include at least the state minimum coverage, so you won’t drive off the lot without at least that coverage.

Still, even if you have personal car insurance, you may want to purchase a rental company's liability insurance as a supplement if you know you’ll be driving a lot, the car you’re renting is not a model you normally drivei , and you’ll be driving on unfamiliar roads. We recommend carrying at least $25,000 of bodily liability insurance per person, $50,000 of bodily liability per accident and $25,000 of property liability (25/50/25), as lower limits may not cover the full costs of a crash. So if your own insurance doesn’t reach those minimums, supplemental rental liability insurance may be a good bet.

Collision damage waiver/loss damage waiver vs. comprehensive and collision

If you own collision and comprehensive coverage on your personal auto insurance policy, you can usually choose to decline this waiver, which typically costs about $9 to $19 per day in the U.S. However, before you do, make sure your collision and comprehensive insurance limits ideally cover up to the actual cash value (ACV) of the rental vehicle so you have adequate protection.

Personal accident insurance vs. PIP, medical payments and health insurance

If you already have medical payments, no-fault or personal injury protection through your auto insurance policy, or adequate personal health insurance, you may safely decline the personal accident insurance that rental companies offer. This covers the medical fees incurred due to a car accident.

Depending on where you live, you may be required to carry such insurance on your personal policy. Currently, 13 states require PIP coverage to be included with auto insurance policies. Where PIP coverage isn’t required, you may buy it.

Alternatively, you can turn to your health insurance to cover your medical bills from an accident. Since these costs can easily amount to tens or hundreds of thousands of dollars, be sure your health insurance policy is adequate to protect you. Insured drivers from these 15 states have at least some overlapping coverage from their PIP policies.

States that require personal injury protection coverage

Personal effects coverage

Personal effects coverage reimburses you for personal items that may be stolen from your rental vehicle. However, renters or homeowners insurance policies typically include this coverage. For example, State Farm includes off-premises loss in their renters insurance policy worldwide for 16 types of peril (including fire, theft and explosions). So if you have either of those policies, you can decline this supplemental coverage.

Which insurers cover rental cars?

Most car insurers, including 10 of the biggest providers listed below, offer rental car coverage in their policiess (in most cases):

However, you should check the language of your policy or speak with your insurance agent to be certain you're covered.

Types of rental insurance covered through credit cards

In addition to personal auto insurance and renters or homeowners insurance, many major credit cards offer supplemental coverage if you use that card to pay the full balance of the rental.

However, this insurance is sometimes secondary, meaning if you have auto, renters or homeowners insurance, those will be applied first.. Further, credit card coverage often comes with other caveats, such as a requirement that you decline the CDW offered by the rental policy.

When should I buy rental insurance, even if I'm already covered?

There are a few cases when you might want to purchase insurance from a rental company, even if you're already covered by your personal policies:

If you only have liability insurance, we recommend purchasing the collision damage waiver (CDW). Your liability insurance will help protect you if you damage another vehicle, but it won't cover any of the costs of repairing your rental vehicle. Without a CDW or personal collision and comprehensive insurance, you'll be responsible for any repair costs and loss-of-use fees you incur on your rental, even if you weren't at fault for the accident.

If you only have the state-mandated minimum liability insurance, you might want to opt for additional liability insurance from the rental company to protect yourself from the costs of damaging another vehicle and its passengers. For example, Arizona's state-mandated minimum bodily injury liability is just $15,000 per person. If that's the amount you carry on your policy, and you cause an accident that results in $200,000 in medical expenses for the other driver, you'd be responsible for the difference of $185,000. Additional liability protection would narrow or eliminate that gap.

If your personal auto insurance policy has high a deductible and you're worried about having to pay for minor damage, such as dings or scratches, on your rental, the CDW will relieve you from responsibility for these repairs (provided it doesn’t come with its own comparable deductible). For example, repairing a scratch on a car can cost anywhere from $150 to $900. On your own vehicle, you can choose to turn a blind eye to minor defects, but a rental company may not. Having a high deductible on your policy means you'd wind up paying out-of-pocket for any needed repairs..

If you're an at-risk driver or you want to protect your personal auto policy premiums, you might want to purchase their CDW, liability or personal accident insurance. This is especially true for drivers who have already had an at-fault claim in the last three years and don't want to risk another increase in their auto insurance premiums. One at-fault claim can result in an average premium increase of 10% to 25% for three years. If that driver makes a second claim within that time period, another increase of at least 45% is probable.

Anyhike in your insurance premiums could quickly eclipse any amount you spend on supplemental insurance from a rental company. However, a claim made on an insurance policy purchased from a rental company will have no effect on your personal insurance premiums, since the policy is underwritten by a separate insurer.

If your personal vehicle is much less valuable than your rental, your personal collision and comprehensive policies might have low limits on the maximum coverage they provide that don’t meet the value of the car you’re renting. For example, let's say you drive a standard 2009 Nissan Altima in good condition with 100,000 miles on its odometer. The actual cash value (ACV) of your car is about $2,700. Any collision and comprehensive policies you have would likely cover you only up to that amount, less the deductible.

But let's say you rent a 2016 BMW 2 Series with 10,000 miles on its odometer. The ACV of that vehicle is about $22,000. Were you to get into an accident that totaled the BMW, your personal policy might only cover up to $2,700 of the damage, leaving you on the hook for the rest after the deductible is applied. Thus, ifyour rental car is much more valuable than your personal vehicle, it's wise to purchase the CDW to eliminate the potential for such financial responsibility.

Frequently asked questions