A complete guide to rental car insurance

Should I get rental car insurance? Yes, when you rent a car, it’s best to get car rental insurance. This guide covers where to buy insurance from, what type of coverage to get, and what those policies cover.

Do I need rental car insurance?

The short answer is: yes, you definitely need it! The tricky part is knowing what type of insurance you need, where to get it, and what different policies cover.

There are many different types of car insurance for a rental car. Deciding which one to take depends on the level of protection you want. Some cover only the vehicle you rented, others also cover injuries or damage caused to others or to yourself and your passengers.

The car rental company you select will clearly mention in their terms and conditions which type of insurance is mandatory according to their own policy and local legislation. Keep in mind that car rental companies tend to recommend additional coverage, so determining what’s necessary and what’s extra in advance can help you choose what’s best for you.

If you’re looking for budget-friendly options, make sure to verify the coverage of the insurance policies you already have to potentially save money.

Where can I get a rental car insurance?

Different companies sell car rental insurance. Your options include the following:

• The car rental company's insurance
• An independent insurance broker
• Travel insurance
• Your car insurance
• Your credit card

All of these options have different ranges of price, coverage, and convenience. For example, while it may be easier to get the car rental insurance directly at the counter when you arrive to pick up your vehicle, it’s unlikely that it will be your most budget-friendly option.

Independent insurance is an option that can be just as convenient without the hefty cost. Insurance companies have analyzed the requirements of car rental agencies and created coverage services for the vast majority of rental car scenarios.

When looking at car rental options on KAYAK, you may see the option to add insurance from an independent insurance broker to your booking; that way you know what your coverage looks like before even arriving at the car rental counter to pick up your vehicle.

Insurance coverage tends to have a limitation when it comes to location and circumstance. Make sure you check the regions where your coverage applies and what specific circumstances are or aren’t covered. The insurance you have could only cover you if you’re driving in your country of residence; also, most insurance companies won’t cover accidents where the driver has consumed alcohol above the local limit.

Does my personal car insurance cover rental cars?

Does my car insurance cover rental cars? The most common answer is: it depends. However, it is definitely worth checking with your personal car insurance. Some will cover your rental as well so chat to them before adding a potentially costly policy to your rental agreement.

Chances are if you don’t have comprehensive coverage for your personal car, the insurance won’t cover your rental car either. These days more often than not, insurance will only cover a specific car mentioned on the policy. This means you won’t be covered if you crash your friend's car or a rental. Some policies will cover you when driving other cars but the coverage might be limited and usually won’t include driving abroad.

In the majority of the cases, you will only be covered for personal use but not if you are getting a rental car for a business purpose. 

Which credit cards cover car rental insurance?

There are plenty of good credit cards out there that not only allow you to collect miles and airline status but also offer various insurance policies. Check the fine print of your card to see what they offer. Cards like the United Club Infinite Card, Chase Sapphire Preferred Card, and Capital One Venture X Rewards Credit Card include coverage like Auto Rental Collision Damage Waiver.

Do check the conditions though because some cards require you to use it for your rental booking before the insurance will take effect. Some might also limit coverage to a certain timeframe or to specific locations.

Rental car insurance coverage

Car rental insurance typically covers three basic things – damage, theft, and third party liability. Damage to the rental car includes damage to the bodywork, which is most of the car’s exterior including the bumpers, fenders, doors, etc. That doesn’t include the windows, wheels, or the interior. The most you’d have to pay for damages is called the deductible.

Theft cover means you won’t have to pay for a new car if the rental car gets stolen, or gets damaged if someone tries to steal it. Again, the most you’d have to pay is the deductible of the theft protection policy.

Third party liability is if you hurt anyone or damage anything in your rental car. There’s usually a maximum amount that this policy would pay out to the third party.

Those are the three basic types of coverage, but there are several things that additional policies can also cover. What happens if you get injured in a rental car? If your stuff gets stolen in a rental car? What happens if you get into an accident with someone who’s not insured themselves? Well, there are policies that cover each of these situations too.

What car rental insurance should I get?

Now that we know what a policy can cover, it’s important to know what type of insurance applies to each type of coverage. When it comes to rental car insurance options, there are a bunch of confusing acronyms, scenarios, and regulations that change from city to city.

There are basically six types of coverage depending on their function. You’ll find insurance that protects the rental car, other people and their property, personal accidents, and roadside assistance. Here’s a simple break-down of your options:

In the end, “how much is car rental insurance” depends on a lot of factors that come down to your desired level of protection. Insurance policies typically cover expenses up to a certain amount and payment is either covered by the insurance company on the spot or refunded to the policyholder after an investigation.

Reading the terms and conditions of your rental agreement carefully and comparing your insurance options is the best way to save time and money, so that you can enjoy a hassle-free trip feeling safe and protected.

How does my destination impact my insurance needs?

While all rental car insurance policies are important, some are truly indispensable and will save you a lot of trouble in the event of an incident. A must-have is Third Party Liability Insurance, which covers damage done to other people or their properties. Another policy that you are strongly advised to add is the Collision Damage Waiver, which covers you in case of damages to the car.

Make sure you ask about the excess involved when adding a policy, and if the amount is particularly high, you can get Car Rental Excess Insurance to cover that. Additional insurance worth considering is Roadside Assistance, especially if you are in a foreign country, and Personal Accident Insurance, which covers your personal expenses in the case of an accident.

When choosing which policies to add, take into consideration the roads you’ll be driving on as well as the climate, as rough terrain might require a higher level of insurance coverage.

Car rental insurance in the US

When traveling to the US, each state might have a different law as to which insurance is required and which is not, but overall, the three main types of insurance that you should have in all cases are Third Party Liability Insurance, which is a requirement, Collision Damage Waiver (CDW) or a Loss Damage Waiver (LDW). Note that the latter comprises both CDW and Theft Protection, which means you are covered if the vehicle is stolen and for damages sustained during your rental period as a result of theft.

Rental car insurance in the UK

When renting a car in the UK, the insurance policies you will be offered are similar to those in the rest of Europe or the US. The main thing to note is that Liability Insurance is the only policy that is legally mandatory to have. Collision Damage Waiver is not a legal requirement but is often included and highly advisable.

Car rental insurance in Europe

When renting a car and traveling throughout Europe, you will find that some insurance policies might already be included in your contract such as Collision Damage Waiver, Third Party Liability and Theft Protection. Some of these will include an excess, and if you want to reduce it to zero, consider taking out an Excess Waiver policy. However, make sure you read the fine print in regards to what it does and does not cover. If you are planning to travel around Europe and cross borders with your car, it is important to double-check the car rental policy and ensure that you have coverage in all the countries you will be visiting.

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