If you’ve ever rented a car, you know that you're offered insurance by the rental car company before you can get your keys and drive off. Rental car companies offer you three different types of coverage. Whether or not you should purchase any or all of them depends on both what your current auto insurance policy covers and how much you can afford to lose in the event of an accident.
Fortunately, a local independent insurance agent can help you decide if you need rental car insurance, how much, and what type. They'll help you get set up with the car rental insurance you need, along with any other types of car insurance. But first, use our guide to rental car insurance to learn when you might need it.
Key Takeaways - Rental Car Insurance in 2026
The average cost of rental car insurance ranges from $11 to $56 per day, depending on the provider and the type of coverage you buy.
Your personal auto policy may already include sufficient coverage for a rental vehicle, especially if you have collision and comprehensive insurance.
Your primary credit card may also already provide sufficient coverage for a rental vehicle.
You might still need to buy separate rental car coverage if you're traveling internationally or renting an especially valuable vehicle.
Working with a local independent insurance agent is strongly recommended, as they can evaluate your existing rental car coverage and determine if you need any supplemental insurance.
Quick Answer: Do You Need Rental Car Insurance?
Not in many cases. Most drivers in the U.S. who have both comprehensive insurance and collision insurance and a credit card for their primary coverage don't need to buy the rental car protection offered at the counter.
However, if you're wondering when rental car insurance is worth it, consider the following four scenarios:
- You're renting a high-value vehicle: If you rent a luxury vehicle that's valued over the $50,000 to $75,000 limit provided by most credit cards, you might want the extra protection from rental car insurance.
- You're traveling internationally: Your car insurance policy and credit card coverage likely don't cover car rentals outside the U.S. and Canada.
- You have a high deductible: If your personal auto policy has a deductible of $1,000 or more, you could benefit from getting coverage for your rental car with zero deductible.
- You don't have full coverage: If you're lacking a full coverage car insurance policy, credit cards, homeowners insurance, or health insurance, you might want to get the rental car insurance offered at the counter for more protection.
How Much Does Rental Car Insurance Cost in 2026?
Rental car coverage ranges from $11 to $56 per day, depending on the type of policy you get and the provider you go through. The table below compares the average cost of rental car insurance per day by provider for 2026.
| Company | Type of Provider | Average Collision Waiver | Average Supplemental Liability Coverage | Average Personal Accident and Effects Coverage | Average Full Protection Package |
|---|---|---|---|---|---|
| Enterprise | Rental company | $31 | $13 | $6 | $50 |
| Avis | Rental company | $30 | $16 | $9 | $54 |
| Hertz | Rental company | $32 | $17 | $7 | $56 |
| Allianz | Third-party | $13 | N/A | N/A | CDW only |
| Bonzah | Third-party | $22 | $12-$15 | $7 | $40 |
| RentalCover | Third-party | $23 | $33–$44 (varies by state) | N/A | N/A |
Daily cost by coverage type
When looking for cheap auto coverage for a rental car, it's helpful to understand the average cost of each type of protection. The table below lists what you actually pay per day for different types of rental car insurance, including the average CDW cost and SLI cost.
| Coverage Type | Average Rental Car Insurance Cost Per Day |
|---|---|
| Collision Damage Waiver | $11-$32 |
| Supplemental Liability Insurance | $12-$17 |
| Personal Accident Insurance | $6-$9 |
| Personal Effects Coverage | $1-$6 |
| Full Bundle | $40-$56 |
Overall, the cost of rental car insurance for one day can range from $40 to $56.
Rental counter vs. third-party provider pricing
Third-party rental car insurance can be much cheaper than buying coverage from a rental counter. For example, Allianz, a third-party provider, charges only $13 per day for a collision damage waiver (CDW), while Enterprise, a rental company, charges $31. Choosing coverage from Allianz could save you about $126 per week.
Further, a full protection package offered by Bonzah (a third-party provider) averages $40 per day, which is considerably cheaper than Enterprise's $50 package, resulting in savings of about $70 per week. Choosing third-party coverage can lead to rental car insurance savings of 40% to 65% compared to a policy from the rental company.
Coverage Type 1: Liability Insurance and Supplemental Liability Protection
Liability insurance coverage is designed to provide coverage for personal injuries and property damage that you cause to a third party. This means that if you are responsible for an accident, the damages you may be sued for can be covered up to your liability coverage limits, which vary by policy.
If you own a car, you must have car insurance by law in most states. All car insurance policies offer liability protection and, in most cases, this coverage extends to a rental car. Be aware that some policies specifically exclude liability coverage for rental vehicles to make the policies cheaper, so when in doubt, ask your independent insurance agent to review your policy.
Ideally, your car insurance will already provide you with enough liability insurance to adequately protect your finances in the event of an accident. In this case, you do not need to purchase this insurance through the rental car company.
However, most state-minimum auto policies cap rental car liability limits at low levels, so you may still need supplemental liability insurance. Adding rental supplemental liability insurance (SLI) can increase your coverage to $300,000-$500,000, offering much greater protection under a combined single limit.
If you do not have car insurance or if your policy specifically excludes rental car coverage, you will be required to purchase liability insurance when you rent the car. Also, it's important to understand that credit cards rarely include liability coverage for rental vehicles.
Coverage Type 2: Personal Accident Insurance (PAI) and Medical Payments
PAI is not the same as personal injury protection (PIP) insurance. PAI is designed to cover necessary medical costs in the event that you or your passengers are injured in a collision while driving your rental car. This can include ambulance services as well as medical treatments. Personal accident insurance for a rental car averages $6 to $9 per day and overlaps with most health insurance.
Many people don't realize that their health insurance policy alone won't cover medical treatment for injuries caused by an auto accident. These are typically covered by car insurance, a lawsuit, or out of pocket.
If you have car insurance, you might have this coverage as part of your policy. Most states require drivers to carry only liability insurance, but some require medical payments coverage or personal injury protection as part of their minimum coverage requirements.
If you do not have either of these included in your car insurance policy, you can decide whether to purchase them specifically for your rental car. If you want it for the rental car, you likely want it for your personal vehicle as well, so speak with your independent insurance agent about having it added to your auto policy.
Coverage Type 3: Loss Damage Waiver (LDW) and Collision Damage Waiver (CDW)
The loss damage waiver offered by a rental car company is not insurance. It is a contractual waiver that allows you to walk away from costs incurred if you damage the car, so long as you have not violated the terms of your contract (e.g., by driving under the influence, recklessly, or off-road).
If you damage the rental car or if it gets stolen or vandalized, you are responsible for making restitution to the car rental company. You may already have coverage if your personal car insurance policy includes collision and comprehensive coverage.
If you're still making payments on your vehicle, you likely already have this coverage, since it's required by most lenders. If your car loan is paid in full, it's possible that you have foregone this coverage to get reduced insurance rates, and in this case, you would have no protection without the loss damage waiver.
However, even with car insurance, you will still owe a substantial sum if you damage the car. This is because you will still be expected to pay:
- Your insurance deductible to cover the repairs
- A loss of use fee since the car rental company cannot make money off their car while it is out of service
- A diminished value fee to make up for the lost resale value of the car
- Administrative fees, because they have to pay someone to assess and collect all these fees
It's also important to understand the difference between an LDW and a collision damage waiver. A CDW doesn't cover theft and vandalism, while an LDW does.
There are also additional "loss of use" fees to consider, which apply when a rental car company requires you to pay admin costs while a rental vehicle is being repaired. You might have to pay these fees if you're in an accident in your rental car and don't purchase a CDW or an LDW. The average loss-of-use fee is $86 per day, which can add up quickly, especially given that the average cost of adding a CDW and an LDW ranges from $11 to $32 per day.
Coverage Type 4: Personal Effects Coverage (PEC)
Personal effects coverage for a rental car can reimburse you for the theft or damage of your personal items while using a rental vehicle. The average cost of PEC ranges from $1 to $6 per day.
Even though this coverage is highly affordable, you may want to skip it if you already have homeowners insurance or renters insurance, which cover your personal property, even when it's kept in a vehicle. An independent insurance agent can help you determine if you should add rental car belongings insurance when renting a vehicle.
4 Sources of Rental Car Coverage You May Already Have
You might not need rental car insurance if you already have a full coverage personal auto policy, credit card coverage, health insurance, and homeowners insurance or renters insurance. That's because many of the protections offered by rental car coverage are duplicated by these other policies.
Personal auto insurance
In most cases, your personal auto policy's liability coverage extends to rental vehicles. However, you'll want to make sure you have a full coverage auto policy that includes collision and comprehensive insurance as well, before turning down rental car coverage.
Further, remember that your personal policy's deductibles still apply if you are involved in an incident with a rental vehicle. Loss-of-use fees are also typically not covered by personal auto policies from most major carriers. You might also want to talk to your independent insurance agent about non-owner car insurance if you often rent cars.
Credit card rental coverage: primary vs. secondary
Many credit cards don't offer primary rental car coverage; instead, they offer secondary rental car coverage that kicks in after your other coverage, such as your personal auto policy, has already been applied. To activate your secondary credit card rental car insurance, you'll need to pay for your full rental on your credit card and decline coverage at the counter.
Credit card companies also often have restrictions on rental car coverage, such as for vehicles over a certain weight limit, often 10,000 pounds. Coverage may be restricted in certain countries or for rental periods longer than 31 days, as well.
Further, liability coverage is often not included in credit card rental car coverage. An independent insurance agent can further explain rental car insurance vs. credit card coverage.
Health insurance
Most U.S. health insurance plans cover injuries from rental car accidents. This means that paying the extra $6 to $9 per day for PAI can be a waste, since it duplicates the coverage already provided by your health insurance. Skipping PAI if you have health insurance can save you an average of $42-$63 per week when renting a vehicle.
Homeowners or renters insurance
Most homeowners and renters insurance policies include off-premises personal property coverage that protects your belongings if they're stolen from a rental car. However, you'll want to ask your independent insurance agent to help you review your policy. Be sure to check your off-premises personal property coverage sublimit to determine whether you'd like supplemental coverage.
Best Credit Cards for Rental Car Insurance in 2026
Looking for credit cards with primary rental car coverage? Chase and Capital One each offer great options. The table below compares the best credit cards for rental cars in 2026.
| Credit Card Name | Type of Coverage Offered | Coverage Limit | Annual Membership Fee |
|---|---|---|---|
| Chase Sapphire Preferred | Primary | $75,000 | $95 |
| Chase Sapphire Reserve | Primary | $75,000 | $795 |
| Capital One Venture X | Primary | $75,000 | $395 |
| American Express Platinum | Secondary | $50,000 | $695 |
| Capital One Venture | Primary | $50,000 | $95 |
| Discover it | Secondary | $25,000 | $0 |
When You Should Buy Rental Car Insurance (and When to Skip It)
Still wondering when to buy rental car insurance? The following checklist can help you decide when to get or skip coverage.
Buy rental car insurance when:
- You have a liability-only auto policy
- You're renting a vehicle that's significantly more valuable than your own
- You're traveling outside the U.S. or Canada
- You're renting a car for business purposes
- You're renting a car for more than 15 days
Skip rental car insurance when:
- You already have a full coverage auto policy
- You also have a primary credit card that covers rental cars
- You're only renting a vehicle for a short term
- You're renting a vehicle within the U.S. or Canada
If you'll be traveling internationally, you'll likely need rental car insurance for a foreign country. A local independent insurance agent can also help you determine when you need rental car coverage, including rental car insurance for international trips and business trip rental car insurance.
How to Save on Rental Car Insurance in 2026
Fortunately, there are several easy ways to make rental car insurance more affordable. Just try any of the following easy tips to save on your coverage:
- Buy third-party coverage: Third-party rental insurance discounts can help you save substantially compared to the coverage offered at rental companies. It's recommended to buy this coverage at least 24 hours before you pick up your vehicle.
- Book online: Booking your rental car online can help you save 10%-15% on average.
- Bundle your coverage: Bundling your primary-coverage credit card with a personal full coverage auto policy can help you save on rental car protection.
- Rent for a week or a month: Many rental companies offer discounts when you rent a vehicle for a weekly or monthly term, ranging from 10%-35% on average.
- Decline duplicate coverage: If you already have existing coverage, such as auto insurance, home insurance, and health insurance, decline duplicate protection offered in PAI and PEC to save money.
An independent insurance agent can also recommend additional ways to save on rental car insurance.
What to Do After a Rental Car Accident
How rental car insurance claims work differs depending on how you get your coverage. Use the following guide to file your rental car accident claim effectively:
- Rental company: If you got your coverage directly from the rental car company, you'll call their 24/7 hotline to report the incident and initiate the claims process. Typically, a full resolution is reached within an average of 7-14 days.
- Credit card: If your rental car coverage is supplied by your credit card, you'll call the benefits administrator to report the incident and file your claim. A full resolution typically occurs within 30-60 days on average.
- Personal auto insurance: If you used your personal auto policy for rental car coverage, you can contact your carrier or independent insurance agent to file your claim. Make sure to report your claim within 24 hours and be ready to pay your deductible.
If you're using your own car insurance policy, your independent insurance agent can contact your insurance company directly to file a claim for you.
FAQs About Rental Car Insurance
Do I need rental car insurance if I already have auto insurance?
Usually, no, if your personal policy includes liability, comprehensive, and collision coverage already. However, keep in mind that you'll have to pay your deductible if you use your personal auto policy to cover a rental car and you need to file a claim. Also, you're unlikely to have international coverage for a rental vehicle, and loss-of-use fees are typically not covered by personal auto policies.
How much does rental car insurance cost per day in 2026?
Rental car insurance ranges from $11-$56 per day. CDW and LDW range from $11-$32 per day, SLI ranges from $12-$17 per day, PAI ranges from $6-$9 per day, and the full bundle ranges from $40-$56 per day. However, third-party providers such as Bonzah and Allianz charge 40%-65% less on average than coverage offered by rental companies.
What is the difference between CDW and LDW?
A collision damage waiver covers damage to the rental car from an accident, while a loss damage waiver adds theft and vandalism protection on top. Major rental brands often use the terms interchangeably; so be sure to always read the contract.
Does my credit card cover rental car insurance?
Many travel cards include damage and theft coverage as a perk. To activate your coverage, pay the full rental charge on the card and decline the coverage offered by the rental counter. Liability is rarely included in credit card rental car coverage, though. Your primary coverage pays first, and secondary coverage kicks in after your auto policy is exhausted.
Do I need rental car insurance if I am traveling internationally?
Yes, in most cases. U.S. auto policies and most credit card rental coverage extend only to the U.S. and Canada. For trips elsewhere, buy coverage from the rental company or a third-party provider before picking up your vehicle.
What is loss of use, and is it covered by my insurance?
Loss of use is what the rental company charges for income lost while the damaged car is being repaired. Some personal auto policies explicitly exclude it. At an $86 average daily rate for loss of use fees, a 14-day repair window adds roughly $1,200 in overall cost.
What happens if I decline rental car insurance and have an accident?
You'd be personally responsible for the cost of any damage, theft, and rental company fees. Your personal auto policy (if it carries comprehensive and collision) and your credit card may pay the bulk of repair costs, but you'd still be on the hook for your deductible, loss of use, and admin fees.
Can I buy rental car insurance from a third party instead of the rental counter?
Yes. Providers like Allianz, Bonzah, and RentalCover sell standalone CDW and full-bundle policies for 40% to 65% less than rental counter rates. Coverage must be purchased at least 24 hours before pickup.
How an Independent Insurance Agent Can Help You Get the Right Auto Coverage
When it's time to rent a car and determine what type of coverage is necessary, no one's better equipped to help than a local independent insurance agent in your area. Independent insurance agents can audit your liability coverage limits, evaluate your collision and comprehensive coverage, and help you add rental reimbursement coverage in just one easy conversation.
Your agent can also shop and compare quotes and policy options for all types of auto insurance from multiple carriers near you to find the best rate. And down the road, your agent will still be there to help you file car insurance claims if necessary.
Sources
https://www.moneygeek.com/insurance/auto/rental-car-insurance/
https://www.consumerreports.org/money/car-rentals/should-you-buy-car-rental-insurance-a5775468749/