Is Rental Car Insurance Worth It? Options and Cost

Summer is a great time for road trips, vacations, and so many other fun outdoor activities. That comes with the need for rental cars, especially if you don’t have a car. Or, when vacationing abroad or far from home where it may be a hassle to bring your own vehicle.

That leaves many asking, “ Should I get rental car insurance?”

In this guide, we walk you through insurance coverage on rental cars so that you can decide whether rental car insurance is worth it.

Does My Auto Insurance Cover Rental Cars?

First, does your personal car insurance cover rental cars? Yes, your normal car insurance covers rental cars for personal trips up to the policy limits, minus the deductible.

But, if you’re traveling for business purposes or overseas, your rental car won’t be covered by your regular auto coverage.

Comprehensive and collision insurance provides equivalent coverage for rental cars as long as your rental is of similar value to your own car.

Liability coverage only pays for injuries and property damage you cause to third parties. It doesn’t cover your own injuries or any damage to your rental.

Does My Credit Card Cover Car Rental Insurance

Yes, most credit cards provide coverage for rental cars. To qualify, the card has to be in your name, and you should use it to pay for the rental. 

Premium credit cards offer primary coverage and come with higher limits. The card can pay the entire claim without the need to file a claim with your insurer. 

Standard cards have lower limits and only provide secondary coverage. Your insurer pays out first before your card comes in to cover any extra costs.

Rental Car Insurance Options

If you decide that you need rental car insurance, there are four options depending on your needs:

Loss Damage Waiver (LDW)

A Loss Damage Waiver provides the same coverage as comprehensive and collision policies. It covers your rental against accident damages, total loss, vandalism, and environmental damage.

Rental Car Personal Effects Coverage

This protects your personal items and belongings if stolen from a rental car. You get similar coverage from a renters or homeowners policy, and may not need it if you have any of these.

Rental Car Liability Coverage

This is similar to your personal liability insurance and covers injuries and property damage you cause to third parties in an at-fault accident. I won’t cover you or your rental. You don’t have to buy it if you already have liability car insurance. 

Personal Accident Car Rental Policy

This covers medical bills for you and any other person onboard in your rental car. It provides similar coverage you get from medical payments( MedPay) or personal injury protection (PIP).

Is Rental Car Insurance Worth It?

In most cases, you may not need to purchase rental car insurance as your regular auto policy or credit card will cover rental cars.

However, there may be occasions when you may need to get rental car insurance, including:

If you don’t have comprehensive or collision insurance
When traveling abroad or for business purposes where your regular auto policy won’t cover you
You don’t have rental car coverage through a credit card
Don’t have your own car insurance or only have liability coverage
When renting a luxury vehicle more valuable than your own car 

So, Should You Get Rental Car Insurance?

Depending on the type of rental car insurance you want, rates may range from $13 to $60 per day. Thus, it can get expensive to buy rental car insurance and may end up doubling your rental costs. 

It may be cheaper to buy additional personal car insurance or increase your insurance limits if you don’t have enough coverage.

An independent insurance agent can help you decide between buying rental car insurance vs. using your own personal insurance for car rentals.