Can I rent a car without insurance? (3 Ways to KNOW You’re Covered)

Although you cannot rent a car without insurance, your car insurance should cover rental cars. Be sure to check your policy or call your provider to ensure you are covered before turning down rental insurance. If you try to rent a car with no insurance, you must purchase coverage from the rental company.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 7, 2021

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Do You Need Insurance to Rent a Car?

Here's what you need to know...

  • If you have personal auto insurance, your policy will cover a rental car in the U.S.
  • If you do not have coverage or believe you will need additional coverage, check with the agent at the car rental company to discuss options
  • Liability-only policies often will not be enough to safely cover your rental

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Rental cars automatically are insured by the company for the minimum liability requirements of the state. So, when you rent a car, it is insured and you won’t get into legal trouble if you don’t have a policy of your own.

Supplemental insurance rates are negotiable and something that should be considered because the state minimum requirements don’t provide adequate protection should you cause a major accident.

If you do not own your own vehicle, and you are tempted not to take on the costs of buying specialized insurance, read this guide to insuring rental cars for all of the pertinent information that you need to know.

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Can I rent a car without insurance?

You can rent a car without auto insurance. When you rent a car, the minimum is already insured. You can get additional coverage to cover yourself.

Why Are Renters Not Legally Bound to Buying Insurance?

You are required by law in most states to insure all vehicles that you own so the rental company has to carry the minimum required coverage.

Since rental car companies will have the vehicle insured, you won’t get a ticket for driving without a rental auto insurance policy.

While you cannot be cited, you can still face a civil lawsuit for causing third-party damages or injuries when you do not have enough liability coverage to pay for property damage or bodily injury expenses.

Almost every state requires a policy with liability coverage, but typically, the required amount is not enough to pay for damages you inflict on others in a major crash. You will be responsible for the balance of what the insurer pays and the cost of the damage.

Also, keep in mind, liability coverage (the kind of protection that is automatically on the rental vehicle) does not cover damage to the rental vehicle itself. If you total the car, you will be liable for the replacement cost out of pocket.

If you are negligent for the injuries, third-party damages, or the damage to the rental, you may be ordered to pay by liquidating your assets or by having your wages garnished.

To truly protect yourself financially, consider the following three ways in which you can be sure you have adequate rental coverage.

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#1 – Will Your Own Coverage Transfer to the Rental?

Some might not even be aware that their private passenger auto policy will extend to cover them while they are driving a rental in the United States.

You need to be sure to check with your carrier to learn exactly how your coverage extends, but it’s nice to know that your liability coverage will follow you as the driver.

Here is a brief explanation of how your personal coverage can protect you:

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What is Liability Insurance?

When you own a car and live in a state where personal car insurance is a requirement, you will have at least a minimum amount of liability coverage.

Liability coverage will pay third-party expenses for:

  • Medical treatments
  • Emergency transport
  • Loss of wages
  • Repairs or replacements when you are negligent for a collision

When you review your policy, you will see that the liability coverage will follow you to provide protection if you are borrowing a car or renting a replacement.

You should always check with your agent to see if you need to notify the insurer before you rent.

There are also other considerations to make. Be sure to check your limits and consider raising them.

When you are driving on unfamiliar terrain, the risk of having a loss is higher.

On many occasions, however, insurers will raise your limits automatically to match state requirements if yours are too low.

What is Physical Damage Coverage?

Physical damage coverage will help to pay for repairs and car replacement of the covered vehicle when you experience a covered loss. It is made up of comprehensive and collision coverage.

Collision losses involve crashing into an object. Comprehensive coverage will pay for losses that do not involve a collision.

Some examples include:

  • Fire
  • Theft
  • Vandalism
  • Explosion
  • Glass breakage

Not all auto policies have physical damage coverage in case of an accident.

You should review your policy closely to see if you have both comprehensive and collision coverage to cover an accident.

If you do, you will be happy to hear that your coverage for physical damage will transfer to the rental car. It is defined under the policy as a replacement vehicle.

Whatever deductible that you carry on your policy will apply when filing a claim for your rental.

If you do not have auto coverage or you do not have full coverage on any vehicle, damage to your rental will not be covered unless you buy a supplemental plan.

#2 – Will Your Credit Card Offer Protection?

Many credit cards include insurance coverage for rental vehicles. The level and type of coverage will vary as well as coverage limits, but it’s worth looking into. Once you figure out which of your cards will provide the best complimentary coverage, you must make sure you do the following:

  • purchase the rental with that card
  • refuse supplemental insurance from the rental company

Keep in mind that certain vehicles aren’t covered by credit card companies’ policies. Find out what vehicles are excluded before making your decision.

#3 – Will the Rental Agency Offer Supplemental Coverage Options?

All consumers who have rented a car know when they’re at the rental counter that the agents are going to push rental car insurance. While the secondary coverage can sound enticing, most believe it just comes down to collecting more money.

Now that you know how your policy works, you can decide if you need to purchase their rental car insurance coverage.

There are several types of rental car coverage peddled at the counter. Knowing how one differs from the other is crucial to cross the duplicates off the list and select the ones that will give you peace of mind.

Here is a breakdown of each:

Rental Car Insurance Options
Rental Car Insurance CoverageProtection Provided
Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)The CDW is a damage waiver that will pay for all of the repairs to a rental car when it is damaged or stolen. The loss must happen when an authorized driver is operating the car and during the period when the waiver is valid.
Personal Accident InsuranceThis coverage pays for emergency medical transport and medical benefits if the renter or their passengers are injured in an accident.
Supplemental Liability ProtectionCar insurers are required to provide a limited amount of liability cover, but you can buy a supplemental amount of liability protection that covers you if you are sued. Anything that is carried by the rental agency is there to protect them and not necessarily you.
Personal Effects CoverageYou most likely will travel with valuable items. If you lose something of value, Personal Effects Coverage will pay to replace up to $500 of your valuables per person. Make sure you know how your property insurance works first.
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