Should You Get Rental Insurance When Renting A Car

You're standing at the rental car counter. Suitcase by your side, flight in a few hours, and the agent hits you with a question that feels like a trap: "Would you like to add insurance today?"

Suddenly, you're stuck. Do you really need this? Or are they just trying to upsell you something you already have through your own policy?

If you've ever rented a car — whether for vacation, business travel, or while your own car was in the shop — you’ve probably faced this exact moment. And if you're like most people, you've probably paid extra more than once just to be safe.

But here's the truth: **rental insurance** isn't always necessary. In fact, sometimes it's just a way for rental companies to pad their profits. Let's break down what you really need to know before saying yes at the counter.

What Exactly Is Rental Insurance?

When you rent a car, the company offers different types of coverage to protect you (and them) in case something happens to the vehicle. These usually include:

• Loss Damage Waiver (LDW) – Covers damage or theft of the rental car
• Collision Damage Waiver (CDW) – Similar to LDW but may exclude certain items like tires or undercarriage
• Personal Accident Insurance (PAI) – Covers medical expenses if you or your passengers are injured
• Personal Effects Coverage (PEC) – Reimburses stolen personal items from the car
• Supplemental Liability Protection (SLP) – Adds extra liability coverage beyond what you already have

Rental companies will often sell you a package that includes all of these for an extra $30–$50 per day. That can easily add up to over $100 for a short trip. But do you really need it?

Does Your Regular Car Insurance Cover Rentals?

If you already have **car insurance**, there's a good chance your policy covers rental vehicles too. Most full-coverage policies extend to rentals, including both collision and comprehensive coverage.

However, not all policies are the same. Here's what to check with your insurer:

• Does your policy cover rental cars?
• Are there any limitations on how long you can drive one?
• Do you have liability coverage that meets state minimums?
• Is there a deductible you’d have to pay if something happens?

Make sure to ask these questions **before** you get to the rental desk. Otherwise, you might end up paying for something you don’t actually need.

What About Your Credit Card?

Some credit cards offer free rental car insurance as a perk. Usually, this kicks in when you decline the rental company’s coverage and pay for the entire rental with the card.

But again, read the fine print. Many credit card plans only offer secondary coverage, meaning they’ll help after your personal insurance pays first. Also, some cards won’t cover luxury cars, trucks, or SUVs.

Common credit cards with rental coverage include:

• Chase Sapphire Preferred
• Capital One Venture X
• Discover it Miles
• American Express Gold Card

Before you rent, call your card issuer and confirm exactly what’s covered.

What If You Don’t Own A Car?

If you don’t own a vehicle, you probably don’t have regular auto insurance. But that doesn’t mean you’re out of luck.

You can still get coverage through a **non-owner car insurance policy**. These are designed specifically for drivers who frequently rent cars or borrow vehicles. They provide liability protection and sometimes even limited physical damage coverage.

Non-owner policies are affordable — usually between $200 and $500 a year — and can save you money compared to daily rental insurance fees.

Table: How Different Coverage Options Compare

Coverage Type	Covers Damage/Theft	Covers Medical Bills	Covers Liability	Typical Cost
Your Personal Auto Insurance	Yes	No	Yes (if included)	$0 extra
Credit Card Rental Coverage	Limited	No	No	$0
Rental Company Insurance	Yes	Optional	Optional	$30–$50/day
Non-Owner Policy	Limited	No	Yes	$200–$500/year

Common Mistakes People Make

Even smart travelers mess this up. Here are some common mistakes to avoid:

• Assuming rental insurance is always needed
• Not checking with your current insurer
• Thinking credit card coverage is the same as full insurance
• Paying for unnecessary add-ons at the counter
• Forgetting to document pre-existing damage

Frequently Asked Questions

Will my car insurance cover me overseas?

Most U.S. policies don’t cover rentals outside North America. If you're traveling internationally, you may need to buy local insurance or opt for a global plan.

Can I cancel rental insurance after I buy it?

In most cases, yes. Just let the rental company know before you pick up the car.

What should I do if the car gets damaged?

1. Call the rental company immediately
2. Report the incident to your insurer
3. Take photos of the damage
4. Keep all receipts and paperwork

Do I need insurance to rent a car in another country?

It depends on where you go. Some countries require additional liability coverage. Check ahead of time.

Is rental insurance worth it if I’m young?

Young drivers often pay high rates for their own insurance. For them, adding rental coverage might make sense — especially if they don’t have a personal policy.

Final Thoughts

The next time you're at the rental counter, take a breath and remember: you don’t have to say yes to insurance right away.

You might already be covered through your regular **car insurance**, a **credit card**, or even a **non-owner policy**. Taking a few minutes to double-check could save you hundreds of dollars without putting you at risk.

So before you swipe your card or sign on the dotted line, ask yourself: Do I really need this? Or am I just paying for peace of mind I already have?

Sources

• Insurance Information Institute - Rental Car Insurance Guide - 2023
• Consumer Reports – Does My Insurance Cover Rental Cars? - 2024
• CreditCards.com – Credit Card Rental Insurance Overview - 2023
• National Association of Insurance Commissioners – Rental Car Insurance Tips - 2024