Updated: July 24, 2025
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Rental car insurance is optional coverage that protects you from financial loss if your rental car is damaged or stolen.
Personal auto insurance with comprehensive and collision coverage typically extends to rental vehicles for personal use, but excludes rental company fees like loss of use charges averaging $35 to $50 daily.
Credit cards like Chase Sapphire Preferred offer primary rental coverage up to $75,000 with zero deductibles, while Capital One Venture X provides coverage without requiring insurance declination.
Rental car insurance is temporary coverage that protects you financially from damage, theft and liability claims when renting a vehicle. It activates immediately upon signing the rental agreement and includes options like collision damage waiver, supplemental liability protection, personal accident insurance and personal effects coverage.
Renters can decline coverage if they have adequate protection through personal auto insurance or credit card benefits.
Whether you need rental car insurance depends on your existing coverage through personal auto insurance, credit cards and risk tolerance. Analyzing coverage gaps and potential out-of-pocket expenses helps you to determine your appropriate protection needs. Consider buying rental car insurance if:
Comprehensive and collision insurance covers damage and theft, including for rental cars. Without this coverage, you’ll need rental car insurance to avoid repair and replacement costs.
Rental companies usually charge higher insurance rates for high-value vehicles. Additional insurance can protect you from major financial loss if your personal policy doesn’t fully cover the rental car’s value.
Your auto insurance and credit card coverage may not apply to international rentals. In such cases, consider buying rental car insurance from the rental company or a third-party provider.
If your deductible is high, you might have to pay a large amount out of pocket after an accident. Rental car insurance can help cover these costs.
Even if you have some coverage through your personal policy or credit card, you might want the extra security of rental car insurance to avoid any potential hassles or coverage gaps.
Consider skipping rental car insurance if you have:
If you have a card providing primary coverage up to $50,000 to 75,000 with zero deductibles often exceed rental company protection while eliminating daily insurance cost
Full coverage auto insurance with low deductibles provides adequate protection for domestic personal rental use without additional insurance needs.
Brief rentals under three days with comprehensive existing coverage may justify accepting limited risk to avoid $45 to $120 insurance costs.
You can get rental car insurance from three main sources: rental companies, your personal auto insurance, and credit cards. Coverage varies significantly between these options each with advantages and drawbacks:
Buying insurance directly from the rental car company when you pick up your vehicle is most convenient but usually costs the most. You may not need it if your personal auto policy or credit card already provides coverage.
Car insurance may cover rental cars. Check your policy or contact your insurer to confirm. If coverage applies, review the limits and deductibles to ensure they meet your needs.
Some credit cards offer rental car insurance, but coverage may be limited. Before relying on your credit card, check whether it provides primary or secondary coverage and review the terms and conditions for exclusions and limitations.
Independent insurers offer standalone rental car insurance policies that can be cheaper than those from rental companies. These policies often provide comprehensive coverage and may have lower deductibles.
Three main sources offer rental car insurance with varying levels of protection: rental companies provide the most comprehensive coverage, personal auto insurance extends your existing policy and credit cards offer limited secondary protection. Compare each one below:
Coverage Type | Rental Car Insurance | Personal Car Insurance | Credit Card Coverage |
|---|---|---|---|
Liability coverage | ✓ | Often, check your policy and limits | Varies by card |
Collision coverage | ✓ | Often, with full coverage car insurance | Varies by card |
Comprehensive coverage | ✓ | Often, with full coverage car insurance | Varies by card |
Personal accident insurance | ✓ | Sometimes, if you have medical payments or personal injury protection | Varies by card |
Personal effects coverage | ✓ | No | Varies by card |
Loss of use coverage | ✓ | Rarely | Varies by card |
Rental reimbursement | N/A | Pays for rental car if your vehicle is being repaired after a covered accident | N/A |
Deductibles | Typically none or low | Varies depending on your policy | Usually none, but varies by card |
Rental car insurance includes six main coverage types that protect against different risks during your rental period. Each type covers specific situations while excluding others and typically activate immediately upon signing your rental agreement and remains in effect throughout your rental duration.
Collision Damage Waiver (CDW) | Damage to the rental car from accidents | Damage to other vehicles or your personal items |
Loss Damage Waiver | Theft, vandalism and weather-related damage to the vehicle | Items stolen from inside the vehicle |
Liability Protection | Damage you cause to other vehicles or property | Your own medical costs or damage to the rental car |
Personal Accident Insurance | Medical expenses for you and your passengers | Pre-existing conditions, extended medical care |
Personal Effects Coverage | Theft of your personal belongings from the rental vehicle | High-value items (e.g., electronics over $500), cash |
Supplemental Liability | Additional liability coverage above basic protection | Intentional damage, reckless or prohibited driving activities |
Rental insurance excludes personal belongings over specified limits, damage from prohibited activities like off-road driving, pre-existing medical conditions and mechanical breakdowns. Rental company insurance provides more comprehensive protection but may not cover expensive electronics or jewelry beyond policy limits.
Most rental companies offer three coverage packages: basic collision and theft protection, premium packages adding liability coverage and comprehensive full protection including personal accident and effects coverage. Understanding each package helps determine your appropriate coverage without paying for unnecessary protection.
This includes collision damage waiver or loss damage waiver only. It covers vehicle damage from accidents, theft, vandalism and weather-related incidents up to the vehicle's full value.
It excludes liability protection, medical expenses and personal belongings coverage. This coverage is best for renters with comprehensive personal auto insurance and credit card liability coverage who need only vehicle protection.
This includes basic coverage plus supplemental liability insurance. It provides vehicle protection and additional liability coverage beyond state minimums, usually $300,000 to $500,000 per accident.
It excludes personal accident insurance and personal effects coverage. This package is good for renters wanting enhanced liability protection beyond personal auto insurance limits without medical or personal property coverage.
Rental company full protection includes all available coverage types, including collision damage waiver, supplemental liability insurance, personal accident insurance and personal effects coverage.
This comprehensive protection covers vehicle damage, liability for third-party property damage and injuries, medical expenses up to $175,000, personal belongings up to $3,500 and administrative fees, providing maximum protection for renters without personal auto insurance, credit card coverage or those seeking complete protection.
Credit cards provide rental car coverage as a cardholder benefit, often replacing rental company insurance, though coverage types and activation rules vary significantly.
Primary coverage pays claims first without involving personal auto insurance, while secondary coverage activates only after your personal insurance processes claims first, potentially leaving you with deductibles and rate increases.
Chase Sapphire Preferred | Primary | $75,000 | Pay for the full rental with the card and decline the rental company’s insurance |
Chase Sapphire Reserve | Primary | $75,000 | Use the card to pay for the full rental and decline rental company insurance |
Capital One Venture X | Primary | $50,000 | Use the card to pay for the rental — no need to decline rental company insurance |
American Express Platinum | Secondary | $50,000 | Pay for the full rental with the Amex card and decline the rental company’s coverage |
Capital One Venture | Primary | $50,000 | Use the card to pay for the full rental and decline rental company insurance |
Discover it | Secondary | $25,000 | Pay in full with the card; coverage limited to rentals of 31 days or fewer |
Most cards require using the card for the entire rental payment and decline all rental company insurance to activate coverage. However, Capital One Venture X uniquely provides coverage without requiring insurance declination. Understanding primary versus secondary coverage differences and specific activation requirements helps determine the best protection strategy.
Most cards exclude vehicles weighing over 10,000 pounds and don't include coverage outside the United States and Canada.
Credit card rental coverage provides collision damage protection of $25,000 to $75,000 and theft coverage, but excludes liability protection, personal accident insurance and comprehensive benefits. This leaves you personally responsible for damage to other vehicles and medical expenses from accidents.
Rental company insurance offers complete protection, including liability coverage up to $1 million and immediate on-site claim processing with replacement vehicles available within hours. Credit card claims require specific activation steps and third-party processing that can take weeks to resolve.
Your personal car insurance often extends to rental cars, but understanding exactly what transfers can save you from buying unnecessary coverage at the rental counter. Here's what your policy typically covers:
Liability Protection | Covers injury or property damage you cause to others while driving a rental car | Your own injuries or damage to the rental vehicle |
Collision Coverage | Pays for damage to the rental vehicle from an accident, if you carry this coverage | Damage to other vehicles or high deductibles ($250–$2,500 may apply) |
Comprehensive Coverage | Covers theft, vandalism, weather-related damage, and animal collisions | Personal belongings, mechanical failure, or uncovered events |
Personal insurance usually excludes:
Rental car insurance costs vary, depending on coverage level and company. For instance, basic coverage starts at $44 per day (with Enterprise), and full protection starts at $50 daily with Enterprise. However, credit card benefits provide equivalent protection at zero additional cost.
Here’s a quick overview of rental car companies, their offerings and average costs:
Company | Total Insurance Cost | Supplemental Liability Cost | Collision Damage Waiver Cost | Personal Accident Insurance Cost |
|---|---|---|---|---|
Enterprise | $50 | $13 | $31 | $6 |
Avis | $54 | $16 | $30 | $9 |
Hertz | $56 | $17 | $32 | $7 |
Most companies offer discounts for weekly rentals, starting at 10%, reducing full coverage from $40 daily ($280 weekly) to $210 to $240 weekly. Extended rentals exceeding 30 days qualify for additional 25% to 35% discounts, bringing monthly full coverage costs to $650 to $800 versus $900 to $1,200 at daily rates.
Below is a breakdown of how much rental car insurance costs based on how long you rent a vehicle and the type of coverage you choose:
BASIC COVERAGE
PREMIUM COVERAGE:
FULL PROTECTION
Credit card coverage eliminates daily rental insurance costs for cardholders with qualifying benefits. Rental company insurance does provide superior value in specific situations where credit card coverage falls short or becomes unavailable. Geographic restrictions, vehicle limitations and rental duration affect which protection strategy offers better financial protection and convenience.
Using a credit card doesn't always mean you'll incur interest charges; paying the balance in full each month can avoid this while maximizing savings and coverage quality. Your rental frequency determines which credit card strategy delivers maximum savings compared to daily rental company rates.
Rental car insurance activates immediately upon signing your rental agreement. It provides coverage only for the specific rental duration. Credit card benefits and personal auto insurance may also provide protection, but with different activation requirements, claim procedures and coverage limitations.
Understanding which protection source you're using determines the activation steps, documentation requirements and claim processes you'll follow during your rental period.
Coverage begins when you sign the rental agreement and pay for selected insurance options. It remains active throughout your entire rental period and automatically expires when you return the vehicle to the rental location.
Extended rentals may qualify for weekly or monthly discounts starting at 10% depending on duration and coverage level. In contrast, most rental company insurance provides coverage within the United States and Canada, with international coverage varying by company.
Credit card rental coverage requires using the card for the entire rental payment and often declining rental company insurance to activate protection. However, Capital One Venture X uniquely provides coverage without requiring insurance declination.
Primary credit card coverage pays claims first without involving personal auto insurance. In contrast, secondary coverage activates only after your personal insurance processes claims first, potentially leaving you with deductibles and rate increases.
Personal auto insurance with comprehensive and collision coverage typically extends to rental vehicles with identical limits and deductibles as your personal policy. It covers liability, collision and comprehensive damage for personal use within the United States and Canada.
However, personal insurance excludes loss of use fees charged by rental companies, which start at about $35 daily, administrative and processing fees totaling $200 to $500 per incident, and diminished value claims for rental vehicles worth less after accidents.
Purchase rental company insurance for international travel even if you have domestic credit card coverage, as most cards exclude foreign countries and local claim procedures vary significantly from United States standards.
Getting rental car insurance requires evaluating your existing coverage, understanding available options and making informed decisions at booking or pickup. Following these steps ensures adequate protection while avoiding unnecessary costs and coverage gaps.
Review your personal auto insurance policy by contacting your insurance agent or checking your policy documents to determine if liability, comprehensive and collision coverage extend to rental vehicles. Most full coverage policies protect rental cars for personal use within the United States and Canada with identical limits and deductibles.
Check your credit card benefits by calling the number on your card or reviewing cardholder agreements to verify rental car coverage details. Note whether coverage is primary or secondary, maximum coverage limits, activation requirements and geographic restrictions that may affect protection.
Identify coverage gaps by comparing your personal insurance and credit card benefits against potential rental costs, including liability for damage to other vehicles, medical expenses, administrative fees and loss of use charges that may not be covered.
For renters with comprehensive personal auto insurance and primary credit card coverage: Decline rental company insurance and rely on existing protection to avoid duplicate coverage costs. Ensure your credit card provides primary coverage with limits exceeding $50,000 for adequate vehicle protection.
For renters with secondary credit card coverage only, consider rental company liability insurance to avoid personal auto insurance involvement and potential deductible obligations. Personal insurance claims can affect your rates and driving record even for rental incidents.
For renters without personal auto insurance: Purchase comprehensive rental company insurance including collision damage waiver, liability protection and personal accident insurance. This provides complete protection without relying on non-existent personal coverage.
Online booking typically offers 10% to 15% discounts compared to counter pricing, with the ability to review coverage details and make informed decisions without time pressure. Most rental companies allow coverage modifications up to 24 hours before pickup.
At the rental counter, you can ask questions and clarify coverage details, though agents may use high-pressure sales tactics. Pricing is typically higher than online rates. Review coverage options, and don't feel pressured to purchase unnecessary protection.
Avoid post-pickup purchases as most rental companies prohibit adding coverage after leaving the rental location. Coverage decisions must be made at booking or pickup to ensure immediate protection activation
Make sure of coverage activation. Partial payments with other methods may void credit card protection even if the initial reservation used the qualifying card.
Decline rental company insurance when most credit cards require it to activate coverage, though Capital One Venture X uniquely provides coverage without requiring insurance declination. Verify your specific card requirements before declining rental company protection.
Keep documentation, including rental agreement, credit card receipts and cardholder agreement details, accessible throughout your rental period. This documentation proves coverage activation if claims arise during your rental.
Your deductible is the amount you'll pay out of pocket before your insurance coverage begins. Choosing a higher deductible typically results in a lower premium. However, select an amount you can afford should you need to file a claim.
Read the fine print to understand what your policy doesn’t cover. Common exclusions include driving under the influence, commercial use and off-road use.
Consider the insurer's reputation, claims process, customer reviews and perks like 24/7 roadside assistance. These factors can make a big difference in an emergency.
For rental company insurance claims, report incidents immediately to the rental company's 24/7 claims hotline and follow their specific procedures for damage assessment and documentation. Rental companies typically provide replacement vehicles and handle all claim processing directly.
For credit card coverage claims, contact your card issuer's benefits administrator immediately after any incident and before returning the vehicle when possible. Provide complete documentation including police reports, photos, rental agreement and receipts for prompt claim processing.
Document everything thoroughly, including photos of damage, police report numbers, witness contact information and detailed incident descriptions. Complete documentation expedites claim processing and reduces potential disputes about coverage or liability.
If you frequently rent cars but don't own one, consider non-owner insurance. It's a liability-only policy, meaning it won't cover damage to the rental car itself. However, it can offer better financial protection than the rental company's insurance if you're liable for injuries or damages to another person or their property. You can also increase your policy limits for greater coverage.
Rental car insurance covers vehicle damage or theft, but your auto policy or credit card benefits might already provide enough coverage. We explain rental car coverage options, costs and when buying additional insurance makes sense. Comparing quotes can help you find the best protection without overspending.
We address the most common questions about rental car insurance to help you decide if you need it.
Rental car insurance protects you from financial responsibility if your rental car is damaged or stolen. It typically includes collision damage waiver, liability coverage, personal accident insurance and personal effects coverage.
You might not need rental car insurance if your auto policy covers rentals or your credit card provides primary rental car insurance. Review your policy to confirm coverage details.
A CDW covers damage to a rental car from collisions, theft or vandalism. It’s not insurance but a waiver that limits your financial responsibility. Some CDWs include a deductible, requiring you to pay a portion before coverage applies.
If your auto insurance doesn’t cover rentals, getting rental car insurance is wise. It protects you from out-of-pocket costs for damage caused by theft, vandalism, fire or collisions.
Depending on coverage level and rental company, rental car insurance costs $13 to $41 daily. Basic collision damage waiver averages $15 to $20 daily, while comprehensive protection including liability and personal accident coverage ranges from $30 to $41 daily.
Rental car insurance value depends on your existing coverage. Drivers with credit card benefits or comprehensive personal auto insurance may find rental company insurance unnecessary. However, drivers without adequate coverage benefit from the protection against potential $10,000 to 50,000 claims.
Credit cards do not provide automatic rental car coverage. You must use the card to pay for the entire rental and often decline rental company insurance to activate coverage. Contact your card issuer to verify specific requirements and coverage limits
Without rental car insurance, you're responsible for vehicle damage costs that can range from $2,000 to 50,000 depending on accident severity. Your personal auto insurance may cover damages minus your deductible, but you remain liable for rental company administrative fees.
Most rental companies require insurance purchase at booking or vehicle pickup. You cannot add coverage after leaving the rental location. Some companies allow coverage additions during the rental period by returning to a rental counter.
Rental car insurance covers only authorized drivers listed on the rental agreement. Additional drivers must be added to the contract and meet age requirements, typically 21 to 25 years minimum depending on the rental company policy.
Study Overview
MoneyGeek gathered and evaluated rates using a sample driver profile to determine the average auto insurance cost for specific age groups, which factors affect price changes and how premiums vary by insurance provider.
Data Sources and Depth
We used data from state insurance departments and Quadrant Information Services. We reviewed 22,848 quotes from six providers across 100 ZIP codes.
Driver Profile
We used an average driver profile to determine annual auto insurance costs:
We adjusted this profile by region and coverage type to calculate average costs for drivers with various coverage requirements.
Coverage Levels and Deductibles
A deductible is the amount you must pay before insurance begins to pay. Comprehensive and collision coverage (often called full coverage) offers the best financial protection.
100/300/100 means:
We used 100/300/100 comprehensive and collision coverage for national averages with a $1,000 deductible.
50/100/50 means:
We used 50/100/50 comprehensive and collision coverage for state-specific data with a $1,000 deductible.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
