In most cases, your own car insurance policy applies when you rent a car, so you may not need to purchase additional protection from the car rental company. We’ll compare the types of protection rental companies offer to what’s available from an insurer and what gaps you might need to fill.
Note: This guide is about using your own auto insurance to protect the car you’ve rented from a company like Enterprise, Hertz, or Avis. For auto insurance coverage that pays for a rental car while your vehicle is being repaired, see our guide on rental car reimbursement coverage.
what does my own car insurance already cover?
Most common types of rental car protection are similar or identical to the coverages available in a regular auto insurance policy, and the coverages you have for your own vehicle usually translate to rental cars as well.
If you have liability, collision, and comprehensive insurance on your own vehicle, you’ll already be protected, at least up to the policy limits, for most coverages that rental companies typically offer.
In addition, most renters or homeowners insurance policies cover personal items that could be stolen from your rental. you should review your policies before deciding to purchase coverage at the rental counter.
liability insurance supplement vs. your liability insurance
Bodily injury and property damage liability insurance is almost always required nationwide, so if you have auto insurance, chances are you’re already covered. Plus, car rental companies are required by law to include at least the state’s minimum coverage, so you don’t have to worry about walking off the lot without coverage.
When deciding whether to buy supplemental liability insurance from a rental company, take into account the fact that you may be driving longer than usual during your vacation, in an unfamiliar car on unfamiliar roads. We recommend having at least $25,000 bodily liability insurance per person, $50,000 bodily liability per accident, and $25,000 property liability (25/50/25), as the lower limits may not cover the full costs of a crash .
Collision Damage Waiver/Wide and Collision Loss Damage Waiver
If you have comprehensive and collision coverage on your personal auto insurance policy, you can generally choose to decline this exemption, which typically costs between $9 and $19 per day in the US. uu. But ideally, your comprehensive and collision insurance limits should cover up to the actual cash value (ACV) of the rental vehicle for adequate protection.
personal accident insurance vs pip, medical payments and health insurance
If you already have medical payments, no-fault or personal injury protection through your auto insurance policy, or adequate personal health insurance, you can safely decline personal accident insurance offered by rental companies. this covers medical fees incurred due to a car accident.
Depending on where you live, you may be required to purchase such insurance on your personal policy. Currently, 15 states require PIP coverage to be included in auto insurance policies. where pip coverage is not required, you can buy it.
Alternatively, you can use your health insurance to cover your medical bills for an accident. Since these costs can easily run into the tens or hundreds of thousands of dollars, make sure your health insurance policy is adequate to protect you. Insured drivers in these 15 states have at least some overlapping coverage from their pip policies.
states that require personal injury protection coverage
personal effects coverage
If you have renters or homeowners insurance, you can safely decline this coverage. Personal effects coverage reimburses you for personal items that may be stolen from your rental vehicle, but renters or homeowners insurance policies usually already include this coverage. For example, State Farm includes off-premises losses in its worldwide renters insurance policy for 16 types of peril (fire, theft, explosion, etc.).
Which insurers cover rental cars?
Most auto insurers include auto rental coverage in their policies. the 10 largest insurers nationwide cover rental cars in most cases:
However, you should check your policy language or talk to your insurance agent to make sure you’re covered.
types of rental insurance covered through credit cards
In addition to personal auto insurance and renters or homeowners insurance, many major credit cards offer additional coverage if you use that card to pay your rent balance in full.
However, this insurance is sometimes secondary, meaning it applies only after your personal insurance plans apply. In addition, it often comes with other caveats, such as the requirement that you decline the CDW offered by the rental policy.
When should I buy rental insurance, even if I’m already covered?
There are some cases where you may want to purchase insurance from a rental company, even if you are already covered by your personal policies:
if you only have liability insurance, we recommend that you purchase collision damage waiver (cdw). Your liability insurance will help protect you if you damage another vehicle, but it won’t cover any of the costs to repair your rental vehicle. Without a cdw or personal collision and comprehensive insurance, you would be responsible for any repair costs and loss of use fees that your rental incurs, even if you were not at fault for the accident.
If you only have the minimum liability insurance required by the state, you may want to opt for additional liability insurance from the rental company to protect yourself from the costs of damaging another vehicle and its passengers. For example, the minimum bodily injury liability required by the state of Arizona is only $15,000 per person. If that’s the amount you carry on your policy and you cause an accident that results in $200,000 in medical expenses for the other driver, you’ll be responsible for the $185,000 difference. additional liability protection would allow you to eliminate the risk of such a breach.
If your personal auto insurance policies have high deductibles and you’re worried about having to pay for minor damage like dents or scratches on your rental, CDW will relieve you of liability for these parts. for example, repairing a scratch on a car can cost between $150 and $900. on your own vehicle, you can choose to turn a blind eye to minor flaws. the rental company, on the other hand, may not, and with a high deductible on your policy, you’ll end up paying out of pocket for needed repairs. just make sure any cdw you buy doesn’t come with its own comparable deductible.
if you are an at-risk driver or want to protect your personal auto policy premiums, you may want to purchase your cdw, liability or personal accident insurance. This is especially true for drivers who have already had an at-fault claim in the last three years and don’t want to see another severe increase in their auto insurance premiums. drivers who file their first at-fault claim will likely see an average premium increase of 10% to 25% over three years.
If that driver makes a second claim within that time period, another increase of at least 45% is likely. Those premium increases could quickly dwarf any amount you spend on supplemental insurance from a rental company. however, any claim made on an insurance policy purchased from a rental company will affect your personal insurance premiums, as the policy is underwritten by a separate insurer.
If your personal vehicle is much less valuable than your rental vehicle, your personal collision and comprehensive policies may have low limits on the maximum coverage they provide. For example, let’s say you drive a standard 2009 Nissan Altima in good condition with 100,000 miles on its odometer. The actual cash value (ACV) of your car is approximately $2,700. the comprehensive and collision policies you have on the car will likely only cover you up to that amount, minus the deductible.
now let’s say you drove off the rental company lot in a 2016 bmw 2 series with 10,000 miles on the odometer. the acv on that vehicle is about $22,000. If you were to have an accident that totaled the BMW, your personal policy might only cover up to $2,700 of the damage, leaving you on the hook for around $20,000 after applying the deductible. If your rental car is much more valuable than your personal vehicle, it is advisable to purchase CDW to eliminate the possibility of such financial responsibility.