Do I Need To Buy Rental Car Insurance Coverage?

In most cases, you don't have to buy insurance from a rental car company—unless you don't have your own car insurance.

Most personal auto insurance policies also cover rental cars. You likely don't need additional insurance from a rental car company as long as your own policy includes:

• Collision coverage
• Liability coverage
• Comprehensive coverage
• Full coverage (a combination of liability, comprehensive, and collision)

Check your own car insurance policy for a provision on rental car coverage. You can also ask your insurance agent or insurance company for clarification.

Most rental car companies will still offer you additional coverage at an extra cost. This article will help you understand:

• Types of rental car insurance and what they cover
• When you may want to purchase additional insurance
• Other sources of rental car coverage

What Is a Collision Damage Waiver (CDW)?

The most common add-on rental car companies offer is a Collision Damage Waiver (CDW). This is also called a Loss Damage Waiver (LDW) or a Physical Damage Waiver (PDW).

This coverage protects you from financial responsibility if the rental car is damaged while you're using it. A CDW is not insurance—instead, it waives the rental company's right to hold you financially responsible for vehicle damage. A CDW can also cover loss of use, meaning you won't have to pay the rental car company for lost income while the vehicle is undergoing repairs.

Even if you purchase a CDW, you may still have to pay a deductible. A CDW typically only covers damage to the rental car from a collision. It may not cover damage to other vehicles, property damage, or medical expenses resulting from an accident. It may also exclude certain damage due to reckless driving, speeding, or driving under the influence.

Other types of insurance products rental car companies offer include:

• Liability insurance may be necessary if your personal car insurance policy doesn't provide adequate coverage.
• Personal accident insurance covers medical payments for medical bills resulting from an accident. Check to see if your own policy includes personal injury protection first—you may already have coverage. Some health insurance policies also cover this.
• Personal effects coverage covers personal belongings in the rental vehicle in the event of theft or vandalism. Your homeowners or renter's insurance may already cover these losses.

These insurance costs range from about $10 to $60 per day, depending on the company and type of coverage.

Other Sources of Rental Car Coverage

You may already have rental car coverage outside of your auto insurance policy.

Some homeowner's insurance policies include rental car insurance coverage. This is also true for some renter's insurance policies.

Most major credit card issuers provide rental car insurance coverage if you use that card to pay for the rental. While this is often secondary coverage to your personal auto insurance, it can still be valuable. Make sure you understand the coverage's terms and limitations, which most credit card companies detail in the fine print.

If you've purchased travel insurance for your trip, this policy may also include provisions for rental vehicles.

If you need to rent a car for business, check with your employer about their insurance coverage. Most personal auto insurance policies don't cover work-related car accident or injury claims unless you have commercial coverage.

When You May Want To Buy Rental Car Insurance Coverage

Before you rent a car, review your various insurance (auto, homeowner, renter's, and health) and credit card coverage to see what each policy covers for rental vehicles specifically. Determine any potential gaps that you may want to purchase additional insurance or waivers to cover. This will help you be more informed before you speak with a rental car agent or pick up the vehicle.

Some situations benefit from additional insurance. Some of these include:

• If your personal insurance has a high deductible—this can help you avoid paying more out-of-pocket if you have a claim
• If you're renting a car internationally (your personal auto insurance may not provide coverage)
• If you're renting a specialty vehicle—like a luxury car or motorcycle

Bring Your Insurance Policy Documents With You

Most people don't think to bring their insurance documents when they travel. But pack your insurance information or know how to access it online if renting a car is part of your travel plans.

Rental car companies may try to pressure you into purchasing their rental car insurance coverage by telling you it's the law or that your own insurance won't cover the rental. This typically isn't true. Be prepared to show your insurance policy and credit card contract to the rental agency representative. This will help you avoid purchasing unnecessary coverage.

Need Help With a Car Rental Company or Insurance Provider? Talk to an Attorney

If you've been in an accident with a rental vehicle and there is a dispute over who is at fault, policy claim coverage, or compensation—you may want professional legal help.

Contact a consumer protection attorney in your area for guidance. An attorney will assess how the law applies to your situation, review your coverage, and help you gather documentation. They will help determine the next steps and advocate for your legal rights.