Does Travel Insurance Cover Rental Cars?

Does Travel Insurance Cover Rental Cars?

Whether your rental car is covered by your travel insurance depends on the insurer and plan you choose. Most base plans don't include coverage for rental cars, but some premium plans do. However, some providers allow you to include rental car coverage in your travel insurance policy as an optional add-on for an extra fee. When included in or added to a policy, rental car coverage generally pays for physical damage that occurs to the rental while it's in your possession.

Learn more: What Does Travel Insurance Cover?

Does Auto Insurance Cover Rental Cars?

If you're traveling within the United States (and possibly Canada), you may be able to rely on your personal auto insurance policy to cover you if you're in an accident or your rental is stolen. However, it's best to check with your insurer before you hit the road to find out what it will and won't cover if your rental is damaged.

If you're traveling outside of the United States or Canada and plan to rent a car, your personal auto insurance plan probably won't cover you. In situations where your personal auto policy doesn't kick in, a travel insurance plan with rental car coverage can help protect you.

Learn more: Does My Car Insurance Cover Rental Cars?

What Is Covered by Rental Car Add-On Coverage?

Rental car coverage typically kicks in if your rental is damaged due to an accident, theft, vandalism, natural disaster, severe weather or other covered event. It covers repair or replacement costs up to the policy limit, minus your deductible (if applicable), and rental fees the car company may charge while repairs are completed.

Some plans also include roadside assistance to help you get back on the road quickly if you experience a flat tire, run out of gas, lock yourself out or encounter certain other types of car trouble. If you're traveling with other licensed drivers who are included on the rental agreement, rental car coverage typically applies to them as well.

It's worth noting that this type of coverage only pays for physical damage. It won't cover your personal liability if you're at fault in an accident or your injuries if you get hurt. However, if your travel insurance plan includes emergency medical coverage, your insurer would likely pay for treatment you receive for your injuries.

Tip: Rental car mishaps can interrupt your travel plans. If you miss out on planned activities due to a fender bender or have to cut your trip short because of a serious accident, trip interruption coverage can reimburse you for nonrefundable travel expenses if your plan includes it.

What Is a Collision Damage Waiver (CDW)?

When you go to pick up your car from the rental counter, the company will typically ask if you want to purchase a collision damage waiver. The CDW waives your financial responsibility for vehicle repair or replacement costs if the car is damaged or stolen while you're renting it. Covered events may include crashes, severe weather, falling objects, theft and other circumstances beyond your control.

If you opt for a collision damage waiver, the rental car company will coordinate and pay for repairs. Because the company doesn't submit claims through your personal auto insurance company, damage to your rental won't affect your premium.

Rental car coverage that may be available from your travel insurance provider is similar to a CDW you can purchase from a rental car company, so you probably don't need both. However, the rental company may offer additional protections that your travel insurance plan doesn't include, such liability coverage.

How to Get Rental Car Add-On Coverage

Adding rental car coverage to your travel insurance plan is a simple process—if your insurer offers it. Here's how to do it.

1. Research providers. If you want to include rental car coverage in your travel insurance plan, you must find companies that offer it either as part of the policy you want to purchase or as an add-on. Compare quotes to find the best available price.
2. Decide which travel insurance plan meets your needs. Select a policy that provides the coverage you need. This may include emergency medical, trip delay, interruption and cancellation, emergency evacuation, adventure sports and more. Verify that the policy limits are sufficient, and don't forget to review the exclusions so there aren't any unhappy surprises if you need to file a claim.
3. Opt for rental car coverage. If rental car coverage is not part of the travel insurance plan you select, include it as an optional add-on.
4. Choose additional add-ons. Car rental coverage isn't the only add-on you can include in your policy. Consider additional coverage your insurer offers that you may need, such as cancel for any reason (CFAR), preexisting condition waiver and more.
5. Purchase your policy. Submit your application and pay your premium to complete the process. Review your plan documents carefully and contact the company if you have any questions.

The Bottom Line

Including rental car coverage in your travel insurance plan can provide added financial protection and simplify the claims process if your rental is damaged or stolen during your trip. However, you may not need it every time you travel. If you're staying within the United States, your personal auto insurance policy probably covers you when driving a rental, but check with your insurer to be sure.

Additionally, many travel rewards cards offer rental car coverage that applies inside and outside of the country if you use your card to pay for your rental. If you're traveling outside of the United States and don't have coverage through your credit card, adding rental car coverage to your travel insurance plan may be a good bet. However, it's important to weigh the pros and cons, regardless of where you're traveling, to decide if it makes sense for you.