What are my options for rental car insurance?

Rental car insurance options typically include a damage waiver, supplemental insurance, and personal accident insurance. Compare multiple rental car insurance options to find the best coverage. Check your car insurance coverage to confirm you actually need rental car insurance.

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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 20, 2021

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Here's what you need to know...

  • There are a variety of reasons why rental car insurance may be needed
  • There are also a variety of options included on rental car insurance policies
  • Not having enough car insurance for a rental car could be disastrous

There are numerous reasons you may need to rent a car and just as many things you should know about different rental car insurance options.

First, do your homework to find out which ones you need and which ones you can do without.

Since we all rely so heavily on our cars for everything from transportation to entertainment, it is more than inconvenient when we don’t have them.

Although there are a variety of rental car companies offering a multitude of incentives to earn your business, look at these options carefully and choose only those that are best for you.

Click here to get FREE quotes about services in your area by typing your ZIP code into the box at the top of this page!

Reasons to Have a Rental Car


When something goes wrong with your normal mode of transportation, choosing to rent a car can provide a temporary solution.

Here are some scenarios where you might want to rent a car:

  • when you need a larger vehicle to carry equipment
  • when needing to travel with
  • when flying to a destination and then needing a vehicle
  • when driving many miles in a short period of time and wanting to save the wear and tear on your personal vehicle

Renting can also be a smart way to try out a specific car or different kind of vehicle before purchase.

For instance, if you want to know how you will feel driving a small truck or a car with a stick shift instead of an automatic transmission before you buy one, renting one for a few days will provide a better impression than you would get during a brief test drive.

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Available Rental Car Insurance Options


The Insurance Information Institute, which is dedicated to helping people understand insurance, recommends that you find out what you will need before you decide to rent a car.

One of the options available is called collision insurance or a damage waiver and is used to prevent you from having to pay for repairs in the event of an accident.

Typically, it also stipulates that you do not have to compensate the rental car company for lost revenue that they would be making on the vehicle while it is being fixed.

There is also supplemental insurance you can get to cover yourself and anyone else who is allowed to drive your rented automobile against damages to another person or their possessions.

You may also be offered personal accident and effects insurance, which is intended to take care of anyone in the car with you in case they are injured or their belongings are damaged in a crash.

An emergency sick plan is usually suggested if you are planning a trip to a different country in case you or anyone with you were to get sick while traveling.

Another critical aspect of insurance for a rental vehicle is the credit card you use for the service. Some credit card issuers provide additional protection for you for anything you purchase on the card, including rental car service.

In any case, it is imperative that you check your credit card contract before renting a vehicle.

Remember that the coverage offered at the rental car counter is not backed by an outside insurance company. However, you will need it if your own car insurance policy does not include collision or comprehensive coverage.

Consequences of Not Having Enough Insurance

You might wonder why you are required to have insurance for renting an automobile in the first place. After all, it’s just a rental, right?

In other words, you will never have to drive the rental car again after you are done with it, so it seems like a lot of fuss over nothing.

However, when you rent a car, it is your responsibility to pay for any damages, mishaps or accidents that happen to the car while it is in your possession.

Just like on a regular car, if you have insurance for your vehicle, it offsets any costs you might incur. If not, you would have to handle all repairs and injuries as an out-of-pocket expense.

There could be instances when you have coverage but not enough to protect you in certain situations.

One thing you should know is that the rental car company is legally obligated to automatically give you bare minimum coverage for free.

This is the law in most states, and you can always opt to use only this coverage without purchasing any other insurance package.

Make Sure You Choose the Best Rental Car Company for Your Situation


According to Smarter Travel, an online travel resource, some rental car companies are better than others in certain categories.

If you are planning a long-distance drive in your rental car, you should look for companies that have a generous mileage program or convenient return policies.

Renters who just want a car to get around in for a few days might be best served by a discount car renting company.

Independent reviews on rental car companies can be found at My3Cents.com, where people rate their experiences with a variety of companies and industries.

Getting enough insurance for your rental car need not be a big hassle. When you know all the facts, renting a vehicle can be a convenient, enjoyable experience.

For more FREE information, type your ZIP code into the box found here!

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