When you rent a car, the rental company will likely ask if you want to purchase their insurance to cover your rental. But do you need that insurance to rent a car? Or does your auto insurance already cover your rental car?
Do you need rental car insurance
This can be a confusing situation, and the car rental agency may try to persuade you to purchase their insurance policy. The truth is, your own auto policy may already cover your rental. Here are some important insurance-related considerations to keep in mind when renting a vehicle.
Buying supplemental insurance from the rental company— can add approximately $15 to $30 per day to the cost of the rental.1 However, if you already have an insurance policy on your own car, you may be covered in your rental vehicle.
Finding out if your personal auto insurance covers a rental car
Before you sign any paperwork at the rental office, call your auto insurance agent and ask if your car insurance covers your rental car. If you don’t have liability, comprehensive and collision coverage on your own car, then your insurance likely will not cover your rental car if you get into a collision or damage the rented vehicle.2
Another important thing to keep in mind when figuring out whether or not your auto insurance covers your car rental is the purpose of the trip. If your personal auto insurance doesn't cover business use, you may not be covered by your policy if you rent a car for a business trip.
Always double-check your personal auto insurance policy to make sure that you have sufficient coverage before accepting or declining insurance at the rental office.
Credit cards and rental insurance coverage
In addition to coverage from your auto insurance policy, your credit card company might provide insurance coverage if you use its card to pay for the rental. However, it's important to check with the company before you rent to understand exactly what kind of coverage you may or may not have. In some cases, it might only be collision insurance, which can help pay for any property damage but not cover any costs arising from injuries that occurred in the collision.3
Also, be aware that different credit card companies have different rules and restrictions when it comes to what they cover. Certain models such as sports cars or exotic vehicles are often excluded, and what's covered can vary from one credit card provider to the next. Some don't cover incidents that take place on dirt or gravel roads, while other cards don’t cover damage to wheels and rims.4
Knowing whether or not your auto insurance covers your rental car isn't a simple yes-or-no answer. Because there are many different factors to consider, always contact your auto insurance agent before going on a trip. Review your policy and determine what you might need.