Is rental car insurance necessary?

Rental car insurance isn't necessary, but the benefits of having rental car insurance often outweigh the risks. Rental car insurance coverage with liability and medical coverage can be extremely useful in the event of an accident. Start comparing rental car insurance quotes online with our free comparison tool below so you can find the cheapest rental car insurance rates.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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: Jan 21, 2021

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Here's what you need to know...

  • Rental car insurance includes many options, such as liability and medical coverage
  • Check with your insurance company or credit card company to see if you already have rental insurance
  • Rental insurance is not required, but the benefits can be extremely useful in the event of an accident

If you have ever rented a car, then you have been offered rental car insurance. If you haven’t rented a car before but are planning on it, then you need to be prepared for the rental car insurance offer.

There is a big debate revolving around whether rental car insurance is necessary or simply a way to increase profits for the car rental agency and deplete your wallet.

Enter your ZIP code into our comparison tool to get free insurance quotes immediately!

What Rental Car Insurance Covers

If you don’t have car insurance through your standard car insurance policy or with a major credit card, there are some options you need to consider that are available from the car rental insurance company.

Carefully consider your options and true needs before signing the contract.

The most common option to consider is liability insurance, which is typically covered under your own policy if you have one. The price for liability coverage ranges, but it averages to approximately $10.50 per day.

Medical coverage is another option that can be added on to your contract, but it may be duplicate coverage if you have PIP (Personal Injury Protection) or health insurance. You may purchase medical coverage for approximately $3 per day.

Another option is the collision damage waiver which transfers responsibility from the renter to the rental company in the event a collision occurs. The collision waiver is your most expensive election at almost $20 per day.

The final option you may be presented with is coverage for your personal belongings, which may already be covered in your homeowner’s policy. If you decide to protect items that you may leave in the car, you can do so for a couple of dollars a day.

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The Benefits of Rental Car Insurance

Car rental insurance can be very beneficial if you do not already have coverage with your current car insurance policy or through a major credit card used to pay for the car rental.

Car accidents happen every day, frequently leaving people without car insurance to pay for all of the car damages and associated medical damages.

If you rent a car without insurance and are liable for an accident, there can be serious consequences.

Not everyone considers the risk of auto theft, but if you are in a rental car without car insurance, there could also be serious consequences if the car is stolen.

Whether you are insured or not, you should always follow strict safety guidelines that include the basics of locking your car, keeping valuables out of sight, and parking in well-lit areas.

The Downsides of Rental Car Insurance

Rental car insurance may be a waste of money because many people are already covered by their own car insurance policy. Typical car insurance already covers theft or damage in a rental car.

Furthermore, if you rented the car with a major credit card, you may have rental car insurance through the credit card, giving you protection in the event of an accident or theft.

Before you agree to purchase rental car insurance from the car rental agency, call your insurance agent and your credit card company to find out what coverage you already have.

Be sure to find out what deductibles there may be, if any, and also ask what the limits of your coverage are. It’s also a good idea to find out what you need to do to process a claim so that you are prepared in the event you need to file one.

If you frequently rent a car, confirm your coverage with your car insurance agent and credit card company before each rental, since coverage and limitations can be subject to change.

If you don’t have your own car insurance and you frequently rent cars, you can also consider purchasing a liability policy intended for non-vehicle owners.

Compare Rental Car Insurance Quotes

While car rental companies are required by law to offer certain insurance protection to their clients, consumers are not required to purchase all of the various options.

Choosing rental car insurance is ultimately a personal choice, but you never need duplicate or triplicate protection.

Call your agent with any questions or uncertainties before you rent. To find a car insurance agent, you can request and compare quotes online.

Get started with a free car insurance comparison now!

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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