Should I Get Rental Car Insurance?

Most full-coverage drivers with a deductible of $500 or less don't need rental car insurance. Counter CDW costs $15–$30/day. Credit cards may offer primary CDW.

Find out if you're overpaying for car insurance below.

Written by Mark Fitzpatrick

Updated: May 8, 2026

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Key Takeaways

Rental car insurance makes the most financial sense for drivers carrying only liability coverage, those with a deductible of $1,000 or more, and anyone renting a vehicle type not covered under their personal auto policy.

Rental counter CDW costs $15 to $30 per day. Drivers with full coverage and a deductible under $500 typically pay less by declining rental car insurance and absorbing the deductible in the rare event of a claim.

Rental car insurance purchased at the counter covers only the rental vehicle. It does not cover liability to third parties beyond the included SLI add-on, personal belongings inside the car, or medical expenses. Those exposures require separate coverage or a policy of your own.

Should I Get Insurance on a Rental Car?

Drivers with full coverage and a deductible under $500 can skip over-the-counter rental car insurance in most cases; their personal policy extends to rental cars, and an eligible credit card's CDW fills any remaining gap. The case for buying flips for two profiles: drivers with a deductible of $1,000 or more, where a single repair bill exceeds the cost of counter CDW many times over, and drivers with liability-only coverage, whose personal policy covers damage to other vehicles but leaves the rental itself entirely unprotected.

Without comprehensive coverage on your personal policy, the rental counter's protection is the only thing standing between you and the vehicle's full replacement cost.


Full coverage, deductible ≤$500	No	Personal policy extends to rentals; $500 deductible costs less over time than cumulative CDW spend
Credit card with primary CDW	No	Card pays first; no claim hits your personal policy, no rate impact
Full coverage, deductible $500–$999	Maybe	Run the math against your rental length and CDW daily rate
Liability-only	Yes	Personal policy does not cover damage to the rental vehicle

When You Should Get Rental Car Insurance

Rental car insurance is worth buying when your existing coverage leaves a gap large enough to hurt. Four situations create that gap: liability-only coverage, a deductible of $1,000 or more, renting a vehicle type your policy excludes, and international rentals.

1
You Carry Only Liability Coverage
Liability-only policies do not pay for damage to a rental vehicle, only to the other car if you cause an accident. A totaled economy rental can cost $200 to $400 per day in loss-of-use fees alone while repairs are underway, plus the full repair or replacement bill. Counter CDW at $15 to $30 per day is the only protection available to liability-only drivers.
2
Your Deductible Is $1,000 or More
A high deductible shifts substantial repair risk back to you, even with full coverage. Counter CDW at $15 to $30 per day costs less than most repair bills and eliminates deductible exposure entirely for the length of the rental.
3
You're Renting a Vehicle Your Policy Doesn't Cover
Most personal auto policies cover standard passenger cars but exclude vans, trucks, exotic vehicles, and vehicles above a certain value threshold. When the vehicle type falls outside your policy's scope, personal coverage does not extend at all, regardless of your deductible or coverage level.
4
You're Renting Outside the U.S.
Most U.S. personal auto policies stop at the border. Canada is a common exception, but rentals in Mexico and most of Europe require purchasing local coverage. Confirm with your insurer before departure, assuming coverage applies internationally is one of the more expensive rental mistakes.

When You Can Skip Rental Car Insurance

Drivers with full coverage (collision and comprehensive) and a deductible of $500 or less are the strongest candidates for declining counter CDW. Consider the math: counter CDW on a 7-day rental at $20 per day costs $140. A $500 deductible on a once-every-five-years collision averages $100 per year. Drivers whose credit card provides primary CDW as a cardholder benefit can also skip counter coverage. The deductible cost over time is lower than the cumulative CDW spend, making the skip financially sound.

A gap that remains even when you skip: loss-of-use fees. When a rental car is being repaired after a claim, the rental company charges a daily fee of up to $50 per day. This is for the time the car is out of service. Neither your personal auto policy nor most credit card CDW benefits cover this charge. If your deductible is low and your coverage is solid, this is an acceptable exposure on a short rental. On a two-week trip with a vehicle in the shop for a week, the math changes.

What Rental Car Insurance Covers (and What It Does Not)

Counter rental car insurance typically bundles four separate products, each covering a different exposure and each priced separately.

Collision damage waiver (CDW/LDW): covers the rental vehicle itself

CDW releases you from financial responsibility for damage to or theft of the rental car. It is not insurance; it is a waiver. When active, the rental company cannot charge you for repair costs regardless of fault. Daily cost: $15 to $30.

Supplemental liability insurance (SLI): covers damage you cause to others

SLI adds liability coverage above your personal auto policy limits for third-party bodily injury and property damage claims. Without SLI, your personal liability limits apply. Daily cost: $7 to $15.

Personal accident insurance (PAI): covers medical costs for occupants

PAI pays medical expenses for the driver and passengers injured in a rental car accident. Most drivers with health insurance or PIP coverage can skip this product. Daily cost: $3 to $7.

Personal effects coverage (PEC): covers belongings stolen from the rental

PEC covers items stolen from inside the rental vehicle. Homeowners or renters insurance typically already covers this under personal property provisions. Daily cost: $1 to $4.

Loss-of-use fees: NOT covered by most personal policies or credit card CDW

When you file a claim on the rental, the rental company charges a daily fee for the time the car is out of service for repairs, which can run one to three weeks for significant damage. Neither your personal auto policy nor most credit card CDW benefits cover this charge. On a vehicle out of service for two weeks, loss-of-use fees alone can reach $700 to $1,000. This is the main reason some drivers with full coverage and a low deductible still buy counter CDW: not for collision protection, but to avoid a large, uncovered fee that arrives weeks after they've returned home.

Should I Get Car Rental Insurance?

How much does rental car insurance cost at the counter?

Counter rental car insurance is sold individually or as a bundle. CDW alone runs $15 to $30 per day; SLI adds $7 to $15 per day; PAI adds $3 to $7 per day; PEC adds $1 to $4 per day. A full counter bundle commonly runs $40 to $60 per day, which on a one-week rental can exceed $420 at the midpoint rate.

Is rental car insurance required when you rent a car?

No state legally requires you to purchase the rental company's insurance products. You must show proof of adequate liability coverage to rent a vehicle. Your personal auto policy's liability limits satisfy this requirement in most cases.

What happens if I decline rental car insurance and get in an accident?

If you decline rental car insurance and get in an accident, your personal auto policy responds first for both liability and physical damage, assuming you carry the relevant coverages. If you carry liability-only coverage, you are personally responsible for all repair costs to the rental vehicle.

Does rental car insurance overlap with my regular car insurance?

Rental car insurance often overlaps with a personal auto policy. If you carry full coverage, the counter CDW duplicates your collision and comprehensive coverage, meaning you pay twice for the same protection. The main reason to buy counter CDW even with full coverage is to avoid filing a claim and a potential rate increase, or to eliminate your deductible exposure.

Does my credit card's rental car coverage work internationally?

Credit card CDW benefits vary by card and destination. Most cards cover rentals in the U.S. and Canada but exclude Mexico, Ireland, Israel, Jamaica, and several other countries. Confirm coverage territory with your card issuer before relying on credit card CDW for international rentals.

Does rental car insurance cover my personal belongings if they are stolen?

Standard CDW or LDW does not cover personal belongings; it covers the vehicle only. Personal effects coverage (PEC) is the counter product designed for stolen items, but homeowners or renters insurance typically covers personal property away from home already. Buying PEC is usually redundant for insured homeowners. For full guidance on how much coverage you need across all exposures, see how much car insurance do I need.

CDW daily cost ranges sourced from Enterprise Rent-A-Car and Hertz published rate schedules, accessed April 2026. Credit card CDW country exclusions sourced from Chase Sapphire Reserve benefit guide and Visa Signature benefit terms, accessed April 2026. Loss-of-use fee ranges based on industry standard rental agreements.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has analyzed the insurance market for almost a decade, first with LendingTree and now with MoneyGeek, conducting original research on hundreds of insurance companies and millions of insurance rates for insurance shoppers.

He writes about economics and insurance on MoneyGeek, breaking down complex topics so people can have confidence in their purchase. Like all MoneyGeek analysts, Mark collects and analyzes independent cost and consumer experience data on insurance companies to provide objective recommendations in our content that are independent of any of MoneyGeek's insurance company partnerships.

His insights on products ranging from car, home and renters insurance to health and life insurance have been featured in The Washington Post, The New York Times and NPR, among others.

Mark holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He started his career working in financial risk management at State Street before transitioning to the analysis of the personal insurance market. He's also a five-time Jeopardy champion!

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