Do I need rental car insurance?

Do I need insurance on a rental car?

It’s a big maybe. It depends on the coverage you already have. If your personal Auto policy extends coverage to a rental car, you may not need every optional protection. But check before you decline anything. Your Auto policy, deductible, rental agreement and any credit card benefits can all affect what protection you already have.

Key takeaways

• Your personal Auto policy may already provide some coverage for a rental car.

• Rental companies offer several types of optional protection, some of which may overlap with coverage you already have.

• Credit card rental benefits can be useful, but don’t assume a debit card provides the same benefits.

Rental-car companies have a special talent for turning the beginning of a trip into a surprise insurance exam.

You’ve made your reservation, picked a car and are already thinking about your vacation. Then some helpful person in a polo asks about liability protection, damage waivers and several other things that weren’t on your itinerary. 

You may already have some of the protection you need through your personal Auto policy, a credit card or another insurance policy. The tricky part is that they don’t all cover the same things.

Before you automatically say yes or no at the counter, find out what you already have, where the gaps might be and what the rental company is actually offering.

Auto insurance policies can extend coverage to rental vehicles, but the details vary. Check your own policy instead of assuming the rental gets exactly the same protection as your personal car.

The

National Association of Insurance Commissioners (NAIC) recommends checking your existing coverage before buying protection from the rental company.

Look for:

• Liability coverage

• Comprehensive and Collision coverage

• Applicable deductibles

• Who’s allowed to drive

• Restrictions on where or how the vehicle is used (most of them don’t want you offroading)

• Limits on how long the rental is covered

Your policy gets the final word here. So take a moment to call your insurance company’s customer service to get the deets

The rental company may offer several optional products, but they don’t all do the same job.

Collision damage waiver (CDW) or loss damage waiver (LDW) These waivers can reduce or eliminate your responsibility to the rental company for certain damage to or theft of the vehicle, subject to the rental agreement. Beware: they aren’t the same thing as liability insurance.

Supplemental liability protection This can provide additional protection if you’re responsible for injuries or property damage involving someone else. If you’re traveling with your besties, this is good to explore.

Personal accident insurance This may provide medical or accidental-death benefits for you or your passengers. 

Personal effects coverage This can cover belongings in the rental vehicle. If you have Renters or Homeowners insurance, some protection may already apply to belongings away from home, depending on your policy.

Before adding anything, compare it with the coverage you already have. Paying twice for similar protection isn’t anyone’s favorite vacation souvenir. But if you’re bringing home something special (and expensive) it might be nice to have more coverage.

Sometimes. This is one place where “what’s in your wallet” can really matter.

Some credit cards provide rental-car protection when you use that specific card to pay for the rental. The Federal Trade Commission (FTC) notes that some cards include rental protection and that certain benefits require you to decline the rental company’s collision damage waiver.

Don’t assume a debit card with the same payment-network logo comes with the same benefits. Rental protection is tied to the specific card and issuer. For example, Visa tells cardholders to check with their issuer because benefits can vary by card.

Before relying on either a credit or debit card, check:

• Whether your specific card includes rental protection

• Whether you have to pay for the rental with that card (just having it won’t always help)

• Whether you need to decline the rental company’s damage waiver

• Which vehicles and locations qualify

• How long the rental can last

• Which drivers are covered

• Whether the benefit is primary or secondary

• What damage or fees are excluded

Debit cards can also affect the rental transaction itself. The FTC notes that rental companies commonly place a hold on debit or credit cards for more than the rental cost, which can temporarily reduce the money available in a checking account when a debit card is used.

“My card probably covers it” is worth investigating before someone hands you the keys to a sweet rental.

You can still rent a car, but you’ll need to think more carefully about protection.

NAIC suggests that people who don’t own a car consider a non-owner Auto insurance policy, which can provide benefits beyond a single rental. It also recommends checking credit card benefits and considering liability protection or a collision damage waiver from the rental company when other coverage isn’t available.

What’s available can vary, so review the rental agreement before you drive. Usually the person at the counter can help you with this.

A little homework can save you from comparing insurance products while someone behind you is audibly reconsidering their place in line.

Check:

• Your Auto coverage and deductibles

• Who’s allowed to drive (if you don’t want to do all the driving, this can be a big deal)

• Any rental restrictions in your policy

• Your specific credit or debit card benefits

• Your Renters or Homeowners coverage for belongings

• The rental company’s waiver and optional coverage terms

If anything’s unclear, contact your insurer and card issuer before pickup. It’s better to know what’s up before you’re driving to that place you’ve always wanted to visit.

Common questions about rental car insurance

Maybe not. Your personal Auto policy may already provide some liability or physical damage coverage for a rental vehicle. Check your coverage, limits and deductibles before declining the rental company’s options.

A collision damage waiver (CDW), sometimes called a loss damage waiver (LDW), is an optional agreement that can reduce or eliminate what you owe the rental company for certain damage to or theft of the rental vehicle. Terms and exclusions vary.

It might. Some credit cards include collision or theft protection when you use the card to pay for the rental. Check your card’s current benefits, including any requirement to decline the rental company’s damage waiver. 

Don’t assume it does. Rental benefits are specific to the card and issuer, even when a debit and credit card carry the same payment-network logo. Check your card’s benefits before the rental.

No. Rental reimbursement helps pay for temporary transportation when your own vehicle is being repaired after a covered loss. Rental-car coverage deals with protection while you’re driving a rented vehicle.

Ready before they hand you the keys?

Check your coverage before pickup, not while someone’s holding out a signature pad and your vacation brain has already been activated.

Review your Auto policy, rental agreement and card benefits ahead of time. If you’re a HiRoad customer, check your policy in the app or contact Customer Care with questions about rental coverage.

Shopping for Auto insurance? Get a HiRoad quote and see which coverage options fit the way you drive.

Coverage, deductibles, rental-car protections and claim outcomes vary by policy, rental agreement, location and loss details. Card benefits vary by card and issuer. This article is for general informational purposes only and doesn’t change or replace the terms of any insurance policy, rental agreement or card benefit. Review the applicable documents or contact the provider to understand what applies to you.