woman standing by white car

When renting a car, you might assume that you're covered by your current auto insurance policy. So why do rental companies always ask about supplemental coverage? There are differences both in the renter's responsibilities and the processes for handling claims. Here's what you need to know when renting a car — both in the U.S. and abroad — and how to make sure you're protected during your travels.

Coverage types

When you rent a car, you most likely do have different types of coverage from your auto or homeowners insurance policies, credit card, or supplemental liability insurance. But it's always a wise idea to check the policy provisions first.1 It's important to understand what's covered and the deductibles associated with any coverage you do already have.

  1. Auto and homeowners policy coverages — Your auto insurance may offer some traditional coverage, and your homeowners policy may provide protection against theft and loss of personal items inside the car.1 Note that if you're using the vehicle for business purposes, your personal policies may not offer coverage.1 Also ask about coverage on luxury vehicles if you're choosing a higher-end rental.
  2. Credit card coverage — Review the protections that come with your credit card. Some credit card companies also offer insurance when renting a vehicle, as long as you use your credit card to pay for the rental.1 In the event of a claim, this may act as primary or secondary insurance.2 This is important to understand beforehand because you want to avoid deductibles and get the most coverage.
  3. Supplemental liability insurance — Do you need supplemental liability insurance? This type of insurance may also be included at some level in your auto policy.3 You can also add to this type of policy with your insurance agent to increase your coverage. If you often rent vehicles, speak to your agent about additional umbrella coverage for liability losses.
    Keep in mind that any damage to the rental falls to your personal insurance policy unless you purchase the rental company's damage waiver coverage. Because you most likely already carry some coverage that provides benefits, knowing your gaps in coverage when it comes to insurance on rentals will help you decide what extra insurance you may want to purchase.

Extra fees

Even if you're comfortable with the coverage you have from insurance and credit cards, know that rental companies can charge for losses beyond the damages. Fees associated with recouping the costs, towing and loss of value are all potential charges you may face.4 

Renting abroad5

When renting a car abroad, first check to see whether you need an International Driving Permit. Depending on the country, this may be a requirement. Often your auto policy offers some coverage, but review this with your agent. Not all countries fall under domestic policies.

Knowledge is power when renting a car abroad. While checking your coverage levels is important, knowing the rules of the road can also help prevent accidents — lowering your risk in the process. Educate yourself on the traffic laws in the country you're visiting. One last thing to remember: Many cars overseas are stick shifts. Either practice that driving method before leaving or request an automatic transmission.

[1] https://www.nerdwallet.com/blog/insurance/rental-car-insurance
[2] http://money.com/money/3946573/credit-card-rental-car-insurance-coverage
[3] https://www.thesimpledollar.com/insurance/auto/rental-car-insurance
[4] https://www.smartertravel.com/car-rental-insurance
[5] https://traveltips.usatoday.com/rent-car-overseas-24479.html
This insurance overview is for informational purposes only and does not replace or modify the definitions and information contained in individual insurance policies, their endorsements or their declarations pages, which are controlling. Terms and availability vary by state, and exclusions apply. Products are underwritten by Nationwide Mutual Insurance Company and affiliated companies, including Crestbrook Insurance, Columbus, Ohio. Nationwide, the Nationwide N and Eagle and Nationwide Private Client are service marks of Nationwide Mutual Insurance Company.