No need to cave in to that classic, fear-driven sales pitch at the rental counter. Your personal auto insurance extends and covers you while driving a rental for personal use the exact same way as if you were driving your car. You don't need it if you have full coverage on your policy already. But you may want it to avoid paying your deductible or filing a claim with your insurer in case something goes wrong.
Rental car insurance at the counter vs. your insurance
Here are the most common accidents/claims and how they're covered.
Rental car is damaged or stolen
Your insurance:
Comprehensive and collision
Pays for damages from accidents, glass damage, and events that are out of your control (theft, falling tree limbs, fire, hail, and more). These coverages are optional, so make sure you have them before skipping rental insurance. Remember, if you don't have these on your personal policy, they won't apply to your rental. Also, if you have damages, you'll have to pay your deductible.
See more on car insurance deductibles, comprehensive, or collision.
Rental car company insurance:
Loss damage waiver (also called collision damage waiver)
Covers the exact same incidents, but may not cover you while speeding, driving on unpaved roads, or while intoxicated. You'd only want to consider adding this if you don't have comprehensive and collision on your policy...or if you have a high deductible you want to avoid.
You hit someone else and cause damages + injuries
Your insurance:
Bodily injury & property damage liability
If you're at fault, this pays for damages/injuries you cause. This includes hitting another car, injuring another driver, their passengers, or pedestrians, or damaging someone else's property (mailbox, house, etc.). This is automatically included in your auto insurance policy, but you can choose a limit, which is simply the max amount your insurer will pay.
Rental car company insurance:
Supplemental liability
Covers the same instances, but you could temporarily select a higher amount just while you're driving the rental. You'd only want this if you have a low liability limit or want the extra coverage.
Your stuff is stolen from the rental
Your insurance:
Personal belongings (renters/homeowners insurance)
Could be a cell phone, clothes, computers, etc. These items are actually covered by your renters or homeowners insurance and not auto. This is automatically included in renters/homeowners, and a deductible will apply.
Rental car company insurance:
Personal effects
Also covers your items. You'd only need this if you don't have renters or homeowners insurance or you want to avoid paying your deductible.
Your or your passengers' injuries
Your insurance:
Medical payments or personal injury protection
Medical payments is an optional coverage that pays for medical bills if you or your passengers are injured in an accident. Keep in mind, there's no deductible for this coverage. Your policy may include personal injury protection (PIP), which works similarly and is required to be offered in some states.
Rental car company insurance:
Personal accident insurance
Also covers your injuries. You'd only need this if you opted not to add medical payments and/or PIP to your auto policy or you don't have health insurance.
Why some drivers add car rental insurance
- Don't have to pay your deductible: If you have a high deductible, you could avoid that by adding a lower (or potentially no) deductible.
- Don't have to use your own insurance: If you do have a claim, you can file it against the rental car insurance and not your own to help avoid a rate increase.
- Can add coverage missing from your policy: For example, if you don't have medical payments coverage on your personal auto policy, you could pick up the personal accident insurance.
- Can temporarily increase your coverage limits: This can help if you're concerned about driving an unfamiliar car in a potentially unfamiliar place.
International car rental insurance
Planning to rent a car in another country? If you're driving in Canada, you're covered to the limits of your U.S. auto policy. In any other country, you'll need to purchase separate auto insurance specifically for that country. Your credit card company may offer international car rental insurance at no additional charge if you use that card to pay for the rental. Keep in mind, Mexico has very particular rules when it comes to rental car insurance, and it's usually best to insure through the car rental agency.
See more on international car insurance.
Loss of use coverage:
Safeco: covers loss of use up to $30 per day