Should You Buy Rental Car Coverage When Renting a Car?

QUESTION 01

What are you being offered?

“Rental car insurance” can refer to several products. They address different risks, so accepting or declining one doesn’t answer every coverage question.

Some options may overlap with protection you already have. The National Association of Insurance Commissioners explains these common rental-counter products.

QUESTION 02

Does your personal auto insurance cover a rental car?

It may—but check your actual policy before relying on it. For an eligible rental, your personal auto policy may extend liability protection and physical damage coverage. Collision and comprehensive coverage, deductibles, limits, and the circumstances of the rental all matter.

Having insurance on your own car does not automatically mean every rental vehicle or situation is covered. Travelers explains how existing auto coverage may apply.

Instead of asking, “Do I have full coverage?” ask:

• Does my policy cover the vehicle I’m renting?
• Does coverage apply where I’m traveling and how I’ll use the vehicle?
• What deductible and limits would apply?
• What rental-company charges could remain my responsibility?

QUESTION 03

Why consider a damage waiver if you already have insurance?

A damage waiver is generally a contractual agreement with the rental company, rather than an auto insurance policy. It may waive all or part of your responsibility for damage or theft, subject to its terms.

For example, Enterprise’s damage-waiver explanation identifies it as an optional product and notes that certain actions can invalidate it. Other companies’ agreements may differ.

A waiver may be worth considering if you want to reduce your responsibility for covered vehicle damage or avoid relying on your personal policy for that damage. Ask whether there is a deductible, which losses are included, and what conduct or use invalidates the waiver.

A waiver for the rental vehicle does not settle your separate need for liability protection.

QUESTION 04

Could you owe more than the repair bill?

Before declining a waiver, ask how your protection handles additional rental-company charges:

• Loss of use: Charges associated with the vehicle being unavailable while it is repaired.
• Administrative fees: Charges for handling the damage claim.
• Towing or storage: Expenses following an incident.

The Insurance Information Institute recommends checking these expenses specifically. Whether they are payable depends on the policy, benefit, agreement, and circumstances.

Also ask about diminished value—the vehicle’s alleged reduction in value after damage. Don’t assume protection for repairs includes every related charge.

QUESTION 05

What about your credit card?

Some credit cards offer rental vehicle damage or theft protection. Benefits differ by card, including cards from the same bank. Check the current Guide to Benefits, not just the advertising.

• Is the benefit primary or secondary to my auto insurance?
• Must I pay for the entire rental with this card?
• Must I decline the rental company’s damage waiver?
• Are the vehicle, destination, drivers, and rental length eligible?
• What documents and reporting deadlines apply?

Primary protection may respond before your personal policy for eligible rental damage. Secondary protection generally responds after other applicable insurance. Chase explains that distinction.

Don’t assume a card’s rental damage benefit includes liability insurance. For example, this Visa benefit guide excludes personal liability. Your own card’s guide controls.

QUESTION 06

Is rental reimbursement the same thing?

No. Rental reimbursement generally helps pay for a replacement rental after a covered loss to your own car, subject to limits. It does not, by itself, establish coverage for damage you cause to the rental.

Progressive explains rental reimbursement coverage here.

QUESTION 07

So, should you buy rental car protection?

Consider the rental company’s damage waiver when your existing protection leaves gaps, the deductible would be uncomfortable, or you value the protection offered by that particular agreement.

Declining it may make sense when you’ve confirmed suitable protection elsewhere, understand the requirements, and accept any remaining responsibility.

Look more closely before renting internationally, for business, through a peer-to-peer service, for an extended period, or when choosing an unusual or expensive vehicle. Renting without a personal auto policy also deserves a separate review. The Insurance Information Institute’s rental guide discusses rental and car-sharing arrangements.

Make the decision before your trip, when you can compare the terms without a line forming behind you.