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Rental Car Insurance: What Does It Cover Exactly?

Updated: February 7, 2018

Despite being a relatively simple concept, a lot of people get confused when it comes to rental car insurance.

This is because many travelers do not know if they already have rental car insurance coverage, or if they need to buy insurance.

The consequences for not having adequate rental car insurance are serious, because you can face significant out of pocket expenses after an accident.

This is why it is important to read up on whether you need rental car insurance, and what this type of insurance covers.

There are also significant differences between getting rental car insurance from the car rental office or your existing insurance provider.

What is Rental Car Insurance?

Rental car insurance is a type of auto insurance policy that applies to vehicles you rent for a temporary period of time.

These rental companies are very diligent about going after damages if there is any problem with the car after you return it.

There are many reasons why someone may rent a car. You may be traveling to a different city for work or pleasure, where you need a vehicle to get around. Perhaps your current car is in the shop and you need a rental replacement. Other travelers rent cars when they visit a different country.

In all of these situations, the individual driving the rental car needs some form of rental car insurance. This helps avoid out of pocket expenses if you get into an accident in the rental car. These rental companies are very diligent about going after damages if there is any problem with the car after you return it.

Similar to regular policies, there are liability, comprehensive and collision aspects to rental car insurance. This is why it is so important for people to know if they need rental car insurance or not.

It is better to get some type of cheap car rental insurance instead of having to pay thousands of dollars out of pocket in damages.

Do You Need Rental Car Insurance?

This is the biggest and most important question every driver must ask before they rent a car. If you are planning on taking a trip somewhere and renting a car, call your existing insurance provider and talk with them about rental coverage.

However, policies that only have liability insurance do not provide rental comprehensive and collision coverage.

If you have liability insurance, this will extend to the rental car. Confirm this fact with your insurance provider just to be sure.

However, policies that only have liability insurance do not provide rental comprehensive and collision coverage. This means you are on the hook for any damage to the rental vehicle that you cause, along with damage caused when the vehicle was not being driven.

But if you have comprehensive and collision coverage from your insurance provider, you are good to go. They will almost always extend this form of coverage to a rental car, which means you can reject the rental company’s offer of insurance when you are taking the car.

Keep in mind that you will have to pay your existing insurance company your agreed deductible if they have to provide coverage for expenses related to a rental car accident.

Different Parts of Rental Car Insurance Policies

The parts of rental car insurance policies are very similar to regular auto insurance, but they are worded in a different and slightly more confusing way.

One part of rental car insurance that everyone must consider is personal accident insurance.

For example, the loss-damage waiver portion of a rental car insurance policy is the same thing as collision coverage in a regular policy. If you have collision insurance for the vehicle you own, you do not need to get this coverage from the rental company.

There is supplemental liability protection offered by rental companies for as little as a few dollars a day. However, the only people who need this type of coverage are those who do not own a vehicle, or live in a state where liability coverage is not mandatory in their policy.

One part of rental car insurance that everyone must consider is personal accident insurance. This protects you from any injuries you suffer in an accident that was your fault.

If you do not have a higher tiered health insurance policy, or some personal accident insurance, you should get this policy from the rental car company.

Tips to Save Money on Rental Car Insurance

The best ways to save money on rental car insurance is to remain informed. Do not go on a trip before talking with your insurance company about rental insurance. The last thing you want is to try and call your insurance agent when you are in a different time-zone, or a different country.

If you are not short on cash, which is probably not the case if you are going a vacation, then you should get personal accident insurance and personal effects coverage.

Ask about all facets of rental car insurance and what is covered from your existing policy. This will give you peace of mind and financial protection when you reject certain parts of rental car insurance from the car rental company.

If you are not short on cash, which is probably not the case if you are going a vacation, then you should get personal accident insurance and personal effects coverage.

This will protect you from medical expenses related to accidents, along with providing coverage for any of your valuables and possessions that are stolen from the rental car.

For those who do not have a current car insurance policy, there are specific companies around the world that provide rental car insurance. Their policies are often cheaper than the ones offered by the car rental company.

Who Offers Rental Car Insurance?

The first thing you must note is that regular insurance providers offer rental car insurance. They do not offer it as a separate policy, but they offer it to individuals who already have car insurance policies with them.

There are many companies around the world that specifically offer rental car insurance to those individuals who may not have a regular car insurance policy.

Another way to get rental car insurance coverage is through your credit card company. Many major credit card providers automatically provide rental car insurance coverage to their card holders. Simply call your credit card company and double-check that they offer this service.

There are many companies around the world that specifically offer rental car insurance to those individuals who may not have a regular car insurance policy. For example, companies such as Insure My Rental Car, Allianz Global Assistance and Protect Your Bubble offer rental car insurance policies starting at a few dollars per day.

If you want to compare different policy quotes, you must know where you are traveling, how many days you want to rent a car and the type of car you want to rent.

This information can help you narrow down your list of rental car insurance companies to the most relevant ones.