Does Car Insurance Cover Rental Cars?

Rental car coverage for personal auto

When you rent a car, the rental company may suggest purchasing insurance for it. Before you accept it, understand how your personal auto insurance applies to rental cars.

The rental company may offer you the following coverages:

1. Liability Coverage
   Your personal auto insurance policy covers damage or injuries you may cause while using a vehicle, even if it's a rental. As long as you're comfortable with the liability coverage you’ve chosen, you would have sufficient coverage under your personal auto policy. Take note that long term rentals/leases are not entitled to coverage from your personal auto policy unless the vehicle had been formally added to your policy.

2. Personal Accident Insurance
   This option would cover your medical costs resulting from an accident. However, if you live in a no-fault state, your auto insurance policy already provides coverage for your medical expenses resulting from an auto accident. You would not need the extra coverage for the rental car.

   If you don’t live in a no-fault state, check whether your health insurance covers injuries resulting from car accidents. If it doesn’t, you may want to purchase this extra coverage.

3. Personal Effects Coverage
   This option insures your belongings if they’re stolen from the rental car. A personal auto policy doesn’t cover theft of your belongings, but a homeowners, condo, or renters policy does. If you have one of those types of policies, you shouldn’t need to purchase personal effects coverage.

4. Loss-Damage Waiver (Collision Damage Waiver)
   This option covers damage to the rental vehicle and loss-of-use charges by the rental company. If you have comprehensive and collision coverage on your personal auto policy, it may also apply to a temporary rental car. Coverage would be subject to your policy's chosen deductible. Just note that comprehensive and collision insurance are optional in a personal auto policy. If you don’t have them, you may want to consider purchasing the loss-damage waiver for the rental car. Also take note that long term rentals/leases are not entitled to coverage from your personal auto policy unless the vehicle had been formally added to your policy.

Some credit card companies provide rental car insurance as a benefit of having a card. Check with your card servicer to see if you have coverage through them.

What if I need a rental car because my car is being repaired?

If you get into an accident or experience covered damage to your car, you may need to rent a car while yours is being repaired. With comprehensive and collision insurance, your personal auto policy may help pay for the extra costs you would incur to get around. Learn more about rental reimbursement.

Does My Car Insurance Cover Rentals Abroad?

Most personal auto policies will not cover you when renting abroad. A personal umbrella policy or endorsement may provide coverage, but it can depend on your insurer and where you are traveling. Contact your insurer before your trip so you can obtain the appropriate coverages.

Rental car coverage for commercial auto

Commercial auto insurance works differently than personal auto insurance. To have coverage for a rental car under a business policy, you’ll need to add Hired & Non-Owned Auto Coverages to your policy. It's also important to note that your personal auto policy does not cover U-Haul or commercial truck rentals.