Compare Rental Car Insurance: Rates, Discounts, & Requirements [2023]

For most people, the worst part about renting a car is the last step: when the agent presents you with an expensive, confusing list of options for rental car insurance.

Most of us feel we need to have a master’s degree in car rental insurance to figure this stuff out!

After all, it’s not in the rental company’s interest to make it simple — so we’ve done it for you. Understanding your car insurance policy can help you determine whether or not you’ll need to purchase additional coverage. Sure, rental car insurance can be confusing. But we can help you find affordable rental car insurance quotes. Still asking, “How should I insure my rental car?”

Read more to learn all about how car rental insurance works, and how to compare rental car insurance rates, and then be sure to enter your ZIP code in our free tool to get a free quote today.

Car Rental Insurance

You know that in order to legally drive, you’re required to meet at least the minimum liability car insurance coverage set by the state in which you’re driving.

What is liability coverage? Watch this video for more.

So do you need car rental insurance? Which rental car insurance providers should you consider purchasing insurance from? Does your car rental company offer insurance? Is rental car insurance worth it? Keep reading to find out the answers to these and other questions regarding insuring your rental car.

Do You Really Need Car Rental Insurance?

Make no mistake, you will be asked if you want insurance for your rental car. Yearly car insurance for rental cars is not typically available. Instead, it’s usually charged by the day or the week. Here are some daily car rental insurance rates by company:

Read more:

• Budget Rental Car Insurance Review
• Hertz Rental Car Insurance Review

As you can see, rates vary by company, and even for a given company, daily rates can vary by as much as $20.

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Rental Car Insurance Definitions

Asking, “Do I need supplemental liability insurance when renting a car?” is smart. That’s because rental car insurance is slightly different from your current policy. The rental car insurance agency usually offers coverage slightly above the average minimum car insurance required by state.

Otherwise, there are strong similarities. The rental agency offers coverage in different terms than what the driver is used to, such as:

• CDW: Collision damage waiver
• LDW: Loss damage waiver
• PAE: Personal accident and effects

Although different terms are used, they basically cover some of the same things with limitations in terms and conditions.

According to the Insurance Information Institute, a loss damage waiver (LDW) covers you from liability if a car is damaged in any way or stolen. There are limitations, however, and if the damage is the result of poor driving (like speeding, for example), the waiver may be voided.

Supplemental liability insurance protects you from lawsuits by victims of accidents involving a rental.

When you buy rental car insurance, you need the proper amount of coverage. Multiply the daily rate for coverage by the number of days you’re going to have the car, and you can see how expensive rental car insurance can be.

But don’t worry, just follow these simple steps detailed below, and you’ll know the answer to the question, “Do you want insurance with your rental today?” before you even step to the counter. And maybe even be able to negotiate cheap rental car insurance rates.

Read our car insurance guide if you want even more information.

Step One: Personal or business?

If you’re renting your car on business, you may be covered under your company’s insurance policy, in which case you likely won’t need to worry about the rental car business insurance costs.

Before you leave, find out from your corporate travel department if car rental insurance is covered. It’s possible that you may need to be added to the policy by providing a photocopy of your driver’s license. Your company has to have some type of insurance, so it pays to find out.

If your trip is personal, read on.

Step Two: Are you covered under a current policy?

You may ask yourself, “Do I need rental car insurance if I have car insurance?” You’re already paying for car insurance because that’s the law. Find out if your car insurance policy covers rental cars. If it doesn’t already, you may be able to get a better deal by adding it to your policy, rather than getting it at the last minute from a rental company. Here are some tips:

• Ask your agent – Find out your options from your insurance agent, or go to their website to find out more. If you’re wondering “How do I change car insurance agents?” because your current one isn’t very helpful, looking online or asking around is a good start.
• Look into non-owner car insurance – If you don’t own a car, it is possible to get non-owner insurance through your standard insurance provider
• Check your homeowner’s policy – Since it is usually cheaper to buy all of your insurance as a package with one insurer, you may save money buying rental insurance. Check into bundling policies for car and home insurance for more savings.

Make sure you check all the insurance policies that you have since you may be covered and not even know it.

Read more: Can I use my own car insurance when renting a car?

Step Three: Does my credit card cover car rental insurance?

Which credit cards offer rental car insurance? Many credit card companies offer car rental insurance as a benefit. This is most commonly found on cards that offer regular benefits as part of an annual fee—American Express is the best-known example.

To find out if your card offers car rental insurance, just call the phone number on the back of the card.

Make sure you go beyond just asking if rental insurance is offered, however. Sometimes these car rental policies are just secondary to regular insurance, such as supplemental liability. Find out what and how much coverage you have before you hang up the phone with customer service.

Step Four: Be Loyal

Just like airlines, car rental companies have loyalty rewards programs. Along with the programs come special benefits like rental car insurance for good rates, or as part of an annual fee.

If you’re a power traveler — or are planning to become one — find out whether these loyalty programs can benefit you. You’ll probably be surprised by the perks and not just rental insurance benefits.

This is especially true if you plan on renting cars in another country. Sometimes it’s easier to work with the rental company than with your own insurer since they will be more familiar with the laws regarding insurance in that particular country.

If you’re renting a car out-of-state and are wondering about rental car insurance, insurance rules should stay the same as the state where you are from.

Step Five: How to Save Money on Car Rental Insurance

At this point, if you’re not covered by the steps above, you need to accept some insurance from the rental company, or a third-party rental car insurance company, to make sure there are no out-of-pocket expenses if something happens to your car.

It’s possible that your existing insurance policy already offers the supplemental liability insurance benefit, so if you must have some sort of collision car insurance, go with the loss damage waiver.

The car rental company is likely going to offer you various levels of coverage; just take the cheapest one that will cover you from common scratches and dings. Finally, of course, drive carefully. The best way to save money on insurance is not to get into any accidents.

Can I get cheap rental car insurance in a foreign country?

With an international driver’s license, you can rent and drive a car anywhere in the world.

This benefit comes in handy for business travelers who want to be self-sufficient while traveling abroad. Comprehensive car insurance for driving abroad may have different provisions although the basics are the same.

When an accident happens abroad, many rental agencies try to have the driver pay for damages up front with the promise to reimburse the driver later.

This can be a nightmare for some. Because laws differ from one country to another, there may be slight differences in what is offered. Most personal car insurance companies cover the rental and the driver abroad, although it is best to ask before the assumption is made.

The Bottom Line: Compare Car Rental Insurance

When you’re looking for the best rental car insurance, there are a few things to keep in mind:

• In most cases, insurance is required in order to legally drive
• Check with your regular car insurance provider to find out if you’re already covered when you rent a car
• If your existing car insurance doesn’t cover you when you rent a car and you either can’t or don’t want to purchase coverage from the rental company, you may be able to obtain car rental coverage through your credit car company

Make sure to compare rates from potential providers to make sure you’re getting the best cheap car rental insurance for your needs.

Now that you’ve read through our rental car insurance guide, you can start to compare rental car insurance rates today by using your ZIP code in our free tool.

Free Car Insurance Comparison

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

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