Does My Car Insurance Cover Rental Cars?

Quick Answer

If you're planning to rent a car in the U.S. or Canada, you may be able to use your personal car insurance policy to cover the vehicle. However, there may be some limitations to be aware of before you skip the car rental agency's coverage.

Young man and woman couple on vacation standing beside open car trunk in rental car lot.

When you rent a car, the car rental agency's insurance coverage can be expensive, sometimes costing just as much or more than the vehicle rental rate. Depending on where you're traveling, though, you may be able to use the coverage you already have on your personal vehicle back home.

If you go that route, you may run into some limitations. Here's what you need to know.

Does Your Car Insurance Extend to Rental Cars?

The auto insurance policy you have for your personal vehicle will typically extend to rental cars, as long as you stay within the U.S. or Canada. Outside of those countries, you'll typically need to buy coverage from the car rental agency or rely on your credit card's coverage.

Before you decline rental car coverage on your car insurance policy in the U.S. or Canada, here are some things to keep in mind:

  • You can save money. Depending on the car rental company and the vehicle, full coverage could cost between $33 and $47 per day, and that's on top of what you're paying to rent the car. If you use your personal policy instead, you could save a lot of money, particularly on longer trips.
  • Your collision and comprehensive coverage are based on your personal vehicle. If you rent a car that's worth more than your personal vehicle back home, you may be on the hook for the difference in the event that you get in an accident. With rental car insurance, you'll be covered for the vehicle's full value. Additionally, if you don't carry collision or comprehensive coverage on your personal car, you won't get it on the rental either.
  • Your other policy limits apply. As with collision and comprehensive coverage, your liability, medical and other coverage limits will also apply. If you have low coverage amounts, it might not be enough if you cause an accident that results in injuries or property damage, potentially resulting in a lawsuit.
  • You'll have the same deductibles. You may still need to pay out of pocket based on your personal policy's deductible. If you pay for the agency's coverage, there's typically no deductible.
  • A claim could hike your rates. Even if it's not your personal vehicle, filing a claim for a rental car could cause your personal insurance premiums to go up.

Should I Get Rental Car Insurance?

Car rental agencies provide a few different types of coverage that you can purchase for your rental vehicle:

  • Loss or collision damage waiver waives your responsibility to pay for damage to the vehicle, including theft and vandalism.
  • Liability coverage provides protection in the event that you cause personal injury or property damage while driving the rental vehicle.
  • Personal effects coverage pays for personal items stolen from your rental vehicle.
  • Personal accident insurance covers any personal injuries you and other people in your rental car sustain while driving the vehicle.

With an average cost of $33 to $47 per day, take your time to weigh the advantages and disadvantages of using your personal auto insurance policy instead of buying coverage from the rental agency. Here are some situations where it might make sense to buy the rental agency's insurance:

  • You want to rent a more expensive vehicle for the experience.
  • Your personal policy has high deductibles.
  • You don't carry a lot of liability coverage.
  • You want to avoid claims on your personal insurance policy.
  • Your personal policy doesn't include collision and comprehensive coverage.
  • You're planning to travel outside of the U.S. and Canada.
  • You don't have a credit card that can cover some of the differences.

What Is Secondary Rental Car Coverage?

Secondary rental car insurance is a common benefit offered by credit card companies. If you use your eligible card to pay for the rental and decline the agency's coverage, your credit card will cover some of the expenses not covered by your primary car insurance policy.

In particular, your credit card may cover the cost of your collision or comprehensive deductible, as well as the claim amount that exceeds your personal policy's coverage limits. Your coverage could also extend to other countries outside of the U.S. and Canada, at which point it could be considered primary coverage.

Also, it's important to note that some credit cards offer auto rental collision damage waiver coverage on a primary basis regardless of where you travel, which means that you don't need to file a claim with your personal insurance policy at all.

Keep in mind, however, that credit card coverage does not extend to liability, personal injury or personal effects. So, if you want those covered, you'll need to rely on your personal policy's limits or buy the car rental agency's insurance.

Also, you'll want to read your credit card's benefits guide to learn about limitations and restrictions you may run into based on where you're traveling, the type of vehicle you're renting and more.

Weigh the Balance of Savings and Peace of Mind

Whether you decide to rely on your personal auto insurance policy, your credit card's coverage or the rental agency's insurance, it's important to think about the potential risks of skipping the agency's coverage and weigh them against the cost of what the agency is charging.

If the trip is short and the rental would be fully covered by your personal policy, you may have no issue declining the agency's coverage. But if it's a longer trip or you're concerned about relying on your personal policy or credit card for other reasons, paying that extra amount could provide you with some peace of mind.

Whatever you do, take your time to figure out which path you plan to take before you get to the rental counter to avoid unnecessary stress.

If you want to maximize your savings on your personal auto insurance policy, you can use Experian's auto insurance comparison tool to compare quotes from top providers to ensure you get the best rate.