Does Full Coverage Car Insurance Cover Rental Cars?


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Updated: June 27, 2024

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Your full coverage car insurance likely covers rental cars for personal use, such as vacations or when your vehicle is undergoing repairs. Your policy's limits and deductibles usually apply, and you're usually covered across the U.S. and Canada.

Rental companies typically offer minimal insurance, leaving you vulnerable to high costs after an accident. For additional protection, consider alternatives like travel insurance, credit card coverage or non-owner car insurance.

Key Takeaways

Many insurers cover rental cars for personal use within the U.S. and Canada through full coverage policies.

Rental car insurance offers additional coverage options like personal accident and personal effects protection that your regular policy might not.

If your car insurance falls short, consider alternatives like credit card coverage, travel insurance or non-owner car insurance.

When Full Coverage Car Insurance Covers Rentals

Your personal full coverage car insurance might cover rental cars if you're using them for leisure, not business, and the coverage typically matches what you have on your own car.

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    Renting a Car for Personal Use

    Using a rental car while vacationing or while your vehicle is undergoing repairs is generally covered.

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    Extension of Coverage

    Your collision, comprehensive and liability coverage usually extends to rentals.

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    Payouts Within Policy Limits

    The maximum payout for rental car damage is typically the same as your own vehicle.

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    Within Geographical Limits

    Coverage generally applies if renting a car within the United States or Canada.

Always review your policy's fine print before renting a car. Knowing your coverage limits and exclusions beforehand could save you from unexpected expenses down the road. The best full coverage car insurance policies offer exhaustive coverage and reliable customer service.

Where Car Insurance May Fall Short for Rentals

While your full coverage car insurance might cover many aspects of rental car use, there are specific situations where it may not offer complete protection. Here's a breakdown of the limitations you should be aware of:

Scenario
Possible Coverage Gap

Accidents in a Rental Car

Your policy might cover accidents, but you could be responsible for administrative fees and loss of use (compensation for the rental company's lost income while the car is undergoing repairs).

Theft of a Rental Car

A full coverage policy usually covers rental car theft, but your deductible still applies.

Rental Car Used Internationally

Coverage usually doesn’t extend to rentals outside the U.S. or Canada, requiring separate insurance.

High-Value or Exotic Cars

Coverage may not apply to high-value or specialty rental cars, requiring additional insurance.

Additional Drivers

Unauthorized drivers often aren't covered, and adding them might cost you extra.

Your policy isn't always a catch-all for rental car mishaps. Don't get caught off guard — dig into your policy's fine print and consider supplemental coverage if necessary. Sometimes, it's better to purchase additional rental car insurance or explore other avenues for extra coverage.

What Rental Car Insurance Covers

Even if your personal car insurance offers some coverage for rental cars, there are instances where you might want the extra protection provided by the rental agency. Let's break down the types of coverage agencies typically offer:

Coverage Type
What It Covers

Supplemental Liability Insurance (SLI)

Pays for damages you cause exceeding your personal auto insurance's liability limits

Personal Accidents Coverage (PAC)

Covers medical expenses for you and your passengers if you are injured in an accident in the rental car, regardless of who’s at fault

Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)

Covers damage or theft of the rental car

Personal Effects Coverage (PEC)

Reimburses you for the value of your lost or damaged belongings up to the policy limits

When to Buy Rental Car Insurance

Think twice before skipping the rental counter's insurance offers. That extra coverage could be a lifesaver in some cases, including when:

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    Your Personal Policy Doesn’t Cover Rental Cars

    Not all insurers and policies automatically cover rental cars, so checking your policy details before renting is wise.

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    Your Deductible Is High

    If your car insurance deductible feels like a second car payment, the rental agency's coverage might end up being cheaper if you need to file a claim.

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    You’re Renting an Expensive Car

    Your personal policy limits might not cover the total cost of a high-value rental car, so extra insurance could save you a fortune if something goes wrong.

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    You Need Extra Medical Coverage

    Personal accident insurance can supplement your existing health or travel medical insurance.

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    You're Traveling With Valuables

    If you're traveling with valuable property, you can protect your belongings with personal effects coverage.

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    You Want Extra Peace of Mind

    If you're extra cautious or exploring unfamiliar terrain, the added protection might be worth the cost.

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HOW TO DETERMINE PRIMARY COVERAGE: PERSONAL VS. RENTAL CAR INSURANCE

If you're covered by both your personal car insurance and rental car insurance, knowing which kicks in first is key. This determines the order of payment if an accident or other covered event occurs.

Check Your Personal Car Insurance Policy: Look for language explicitly stating whether rental car coverage is primary or secondary.

Contact Your Insurance Agent: If you're unsure about your coverage, ask your agent to clarify your policy.

Review Your Credit Card Benefits: If you're relying on credit card coverage, read the terms and conditions carefully to determine whether it's primary or secondary.

Alternative Options to Insure Rental Cars

If your car insurance doesn't offer the protection you need for your rental car, don't worry — other options are available. Here's a breakdown of the alternatives you can explore to safeguard your trip:

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    Credit Card Coverage

    Many credit cards offer rental car insurance as a perk when you use the card to pay for the rental. Check with your credit card company to understand the terms and limitations of this coverage.

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    Third-Party Travel Insurance

    Travel insurance policies often include rental car coverage as an add-on or as part of a comprehensive package. This can be a cost-effective option if you're already purchasing travel insurance.

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    Non-Owner Car Insurance

    Non-owner car insurance can provide liability, collision and comprehensive rental coverage if you don't own a car but frequently rent.

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    Umbrella Insurance

    This type of policy provides additional liability coverage beyond your standard auto insurance and can extend to rental cars.

Compare the costs and coverage options of these alternatives to find the one that best suits your needs and budget. Don't wait until the last minute — securing the right coverage before you hit the road can give you peace of mind throughout your journey.

FAQ About Full Coverage Car Insurance and Rental Cars

Let's clear up the most common questions about your full coverage car insurance policy and rental car insurance.

Do you need car insurance before renting a car?
What car insurance coverages cover rental cars?
What’s the difference between personal full coverage car insurance and rental car insurance?
Does your car insurance cover rental cars internationally?
Do you need extra insurance when renting a car in the US?

About Mark Fitzpatrick


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Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.