Whether you’re traveling and need a vehicle or have been in an accident and need a temporary mode of transportation, odds are that one day you'll need a rental car. When that day comes, it's good to know in advance if and how you're covered by car insurance. Most auto insurance policies will cover a rental car, but not every rental situation is the same.
If you have questions about how your current policy covers rental cars, be sure to talk to an independent insurance agent. Not only can a local agent find you the best coverage for your needs and budget, but an agent near you can also help you understand your policy long after you've purchased it. But first, here's a guide to rental car insurance coverage and how to tell if your policy includes it.
Key Takeaways - Does Car Insurance Cover Rental Cars in 2026?
Your personal auto policy likely extends to rental vehicles if you have full coverage.
If you have minimum or liability-only coverage, your personal auto policy won't cover physical damage to rental cars.
If you don't have full coverage, consider buying a collision damage waiver and/or a loss damage waiver from the rental company.
You might also have rental car coverage if you have a major credit card, such as a Chase Sapphire or Capital One Venture X.
Working with a local independent insurance agent is highly recommended, as they can help you review your personal auto policy to determine how much rental car coverage you have and if you need more.
Does Your Current Car Insurance Cover Your Rental Car?
In short, yes. About 90% of full-coverage car insurance policies extend to rental vehicles for personal use. So, if you're asking, "Does my car insurance cover rental cars?" your personal auto insurance will most likely offer some coverage for a rental car if you have liability coverage, collision coverage, and comprehensive coverage. However, you’ll only be covered up to the limits available on your personal policy, and you may not be covered for every situation.
When you’re driving any car, there are two types of damage you can cause: damage with the car and damage to the car. Most policies will provide coverage for any damage you cause with a rental car. It’s part of your liability insurance.
However, the damage you potentially cause to the rental vehicle can make things complicated. If you’re driving a rental car and you dent it, your insurance may not cover the damage unless you have the proper collision coverage on your personal auto policy, and it extends to a rental vehicle.
Further, many auto policies have exotic car rental insurance exclusions. This means your standard auto policy likely won't cover a rental exotic or luxury vehicle valued above $75,000. Additionally, rental vehicles needed for business use and rideshare rental vehicles are often excluded by standard auto policies.
How Your Personal Car Insurance Covers a Rental Car
Your personal car insurance generally covers rental cars with the same coverage limits and deductibles as your own vehicle. Understanding the types of coverage your personal auto policy has and how it transfers to a rental car can help determine whether you need additional insurance offered by the rental insurance company.
| Type of Coverage | What It Covers | What It Doesn't Cover |
|---|---|---|
| Liability | Bodily injuries or personal property damage you cause to third parties while driving a rental vehicle | Your personal injuries or physical damage to the rental vehicle |
| Collision | Physical damage to the rental vehicle from an accident involving another vehicle or object | Physical damage to other vehicles or high deductibles ($250–$2,500 may apply) |
| Comprehensive | Physical damage to the rental vehicle from non-collision events, including theft, vandalism, weather, and accidents with large animals | Your personal belongings, mechanical failure, collision-related damage, or other uncovered events |
| Personal Injury Protection (PIP) or Medical Payments | Medical expenses, lost wages, and other related expenses for your own injuries and injuries to your passengers after an accident, regardless of fault | Physical damage to the rental vehicle, property damage, or bodily injuries to third parties |
Your independent insurance agent can help you get set up with the proper car insurance for rental cars, including rental reimbursement coverage.
Does Your Credit Card Cover Rental Cars?
Most credit card companies require you to pay for the full rental vehicle charge with your card and to decline the rental company's collision damage waiver (CDW) to activate your coverage. Major credit card companies that offer primary coverage include Chase Sapphire Preferred, Chase Sapphire Reserve, and Capital One Venture X. These cards offer up to $75,000 in coverage for rental vehicles.
Major credit cards that offer secondary rental vehicle coverage include Amex Platinum (up to $50,000) and Discover (up to $25,000). You can call your credit card company to ask them whether you have primary vs. secondary rental car coverage. Your independent insurance agent can also help you understand your credit card rental car insurance coverage.
What Rental Car Insurance Does the Rental Company Offer?
When you rent a car, you'll typically want at least physical damage protection for the vehicle and liability protection for yourself. Rental companies offer four insurance options, and you can choose them individually or decline the rental company's insurance.
- Collision damage waiver (CDW): Also called a loss damage waiver (LDW), this covers your rental car if it is damaged or stolen. It might be a good option if you don't have personal car insurance, you don't have a credit card that offers rental car coverage, or you don't want to purchase separate rental car coverage from a third-party provider. You can buy a CDW/LDW from major rental companies such as Enterprise ($31/day), Avis ($30/day), and Hertz ($32/day).
- Supplemental liability protection (SLP): Covers property damage and bodily injury that you cause while driving the rental car. Unless you have very low liability limits in your personal auto policy, you probably don't need to purchase this coverage from the rental company. You can buy SLP from major rental car companies for an average of $10-$17 per day.
- Personal accident insurance (PAI): Covers medical, ambulance, and death benefits for you or the driver of the rental car. You may already have this type of coverage through the personal injury protection or medical payments coverage in your personal auto insurance and your health insurance. You can buy PAI from major rental companies for an average of $6-$9 per day.
- Personal effects coverage (PEC): Covers your personal belongings if your rental car is burglarized. This coverage may also exist in one of your other insurance policies, so it’s best to check with your independent insurance agent to know what coverage you already have. You can buy PEC from major rental companies for an average of $1-$6 per day.
The full counter bundle of all of these coverages typically averages $40-$56 per day. Keep in mind that you can also get rental car coverage from third-party alternatives, such as Allianz, which offers a CDW for $13 per day, and Bonzah, which offers full protection for an average of $40 per day. These alternatives are about 40%-65% cheaper than major rental car companies.
How Much Does Rental Car Insurance Cost Per Day?
The average CDW cost per day ranges from $13 to $32, depending on which company you use. So, how much is rental car insurance per day in 2026? A full protection package ranges from $40 to $56 per day.
You can typically earn a 10% discount on average for a seven-day rental and an average discount of 25% to 35% for a monthly rental vehicle. The table below compares average rental car insurance costs per day by company for 2026.
| Company | Type of Business | Average CDW Cost Per Day | Average SLP Cost Per Day | Average PAI/PEC Cost Per Day | Average Full Protection Package Cost Per Day |
|---|---|---|---|---|---|
| Enterprise | Rental car company | $31 | $13 | $6 | $50 |
| Avis | Rental car company | $30 | $16 | $9 | $54 |
| Hertz | Rental car company | $32 | $17 | $7 | $56 |
| Allianz | Third-party provider | $13 | N/A | N/A | N/A; offers CDW only |
| Bonzah | Third-party provider | $22 | $12/$15 | $7 | $40 |
| RentalCover | Third-party provider | $23 | $33–$44 (varies by state) | N/A | $45 |
When to Buy Additional Rental Car Insurance
At such low costs, it’s easy to be tempted to add one or all of the insurance options offered by rental car companies. But if you have the same or overlapping coverage in your personal car insurance or one of your other insurance policies, it's not usually necessary.
If you're asking, "Should I buy a CDW?" paying $31 per day for a CDW is often more favorable than paying a $2,000 deductible after an accident with a seven-day rental vehicle. Also, you'll likely want or need additional rental car coverage when renting vehicles valued above $75,000, as these are excluded by most credit cards, when taking international trips outside the U.S. or Canada, or if your personal auto policy has a high deductible of more than $1,000.
Here are a few scenarios where you might consider the additional insurance:
- If you don’t have collision and comprehensive coverage: If your personal auto policy only has liability coverage, consider purchasing the CDW to protect yourself against any damage that may happen to the rental car itself.
- If your policy has low liability limits: In some states, the mandated minimum liability coverage is as little as $15,000 per person. If you cause an accident that results in anything more than $15,000 in damage, you’ll be responsible for the difference.
- If your personal insurance doesn’t extend to a rental car: If your health insurance does not offer coverage if you get injured in an accident while driving a rental car, then you may want to consider purchasing personal accident insurance.
- If you’re renting a car internationally: If you’re renting a car outside the U.S. or Canada, you’ll have an entirely new set of rules and guidelines to understand. Most car insurance companies will not extend coverage outside the U.S. and Canada, so it’s smart to opt for the offered additional coverage.
- If you’re renting a car in bad weather: If you're driving a rental car in heightened dangerous driving conditions, like a winter storm, you may want to consider adding extra insurance.
Your independent insurance agent can also advise you on when to buy rental car insurance.
Does Car Insurance Cover Rental Cars in Another Country?
Most personal auto policies and credit cards exclude rental vehicle coverage for rentals outside the U.S. and Canada. For international trips, you'll need to purchase coverage from the rental company or a third-party rental car coverage provider. RentalCover, for example, covers rental vehicles in more than 150 countries. Confirm your international rental car insurance limitations with your independent insurance agent before your trip to ensure you are covered.
What Are Loss of Use and Diminished Value Fees?
Loss of use refers to what rental companies charge for lost revenue while a rental car is being repaired after an accident. Diminished value fees are what these companies charge for the decline in a rental car's value after repairs.
Most personal auto policies don't automatically cover rental car loss-of-use fees or the diminished value of a rental car. However, some premium Visa and Mastercard products offer coverage for rental car diminished value. An independent insurance agent can help review your personal auto policy or credit card coverage for loss-of-use endorsements.
How to File a Rental Car Insurance Claim
If you've been wondering how to file a rental car damage claim, just follow these easy steps:
- Take photos of every side of the rental vehicle before leaving the scene of the incident.
- Document any pre-existing damage on the rental agreement.
- Report any incidents immediately, including to your personal auto insurance company within 14-30 days, the rental company within 7-14 days, and your credit card company within 30-60 days.
- Prepare the required full documentation, including a police report, photos, the rental agreement, and repair receipts, before filing your claim.
A local independent insurance agent can also help you file a rental car insurance claim and keep you updated through every step of the process.
FAQs About Rental Car Insurance Coverage
Does my car insurance automatically cover a rental car?
Yes, if you carry liability, collision, and comprehensive coverage, your personal policy most likely extends to rental vehicles with the same limits and deductibles. Confirm your specific policy's rental vehicle coverage with an independent insurance agent before renting.
What is a collision damage waiver and do I need it?
A CDW (also called a loss damage waiver or LDW) waives your financial responsibility for damage or theft of the rental vehicle. You likely do not need it if your personal auto policy has comprehensive and collision or if you have a primary-coverage credit card.
Does credit card rental car insurance count as primary or secondary coverage?
It depends on the card. Chase Sapphire Preferred, Chase Sapphire Reserve, and Capital One Venture X offer primary coverage up to $75,000, meaning they pay first without involving your personal auto insurance. Most other cards (e.g., Amex Platinum) offer secondary coverage, which activates only after your personal policy pays first.
Does car insurance cover rental cars in another country?
Generally, no. Most personal auto policies and credit cards exclude rentals outside the U.S. and Canada. Purchase coverage before your trip from the rental company or a third-party provider, like RentalCover, which covers you in more than 150 countries.
What are loss of use fees and will my insurance cover them?
Loss-of-use fees are charges the rental company levies for revenue lost while a damaged car is being repaired. Most personal auto policies and credit cards do not automatically cover these fees. Ask your independent insurance agent to verify whether your policy includes a loss-of-use endorsement.
What happens if I only have liability coverage and I damage a rental car?
Your liability coverage protects others from injury and property damage you cause, but it does not cover damage to the rental vehicle itself. Without collision coverage, you would be personally responsible for the repair costs. Consider purchasing the rental company's CDW if your personal policy only includes liability.
Should I buy the CDW if I already have full coverage?
Probably not for domestic rentals, since your comprehensive and collision insurance will cover rental damage, though your deductible applies and filing a claim may affect your rates. Consider buying a CDW if you have a high deductible (i.e., above $1,000), are renting internationally, or want to avoid a potential rate increase.
How Can an Independent Insurance Agent Help?
The easiest way to know whether you need to purchase additional car rental insurance is to understand your risks and what your current insurance offers. If you’re in an accident in a rental car, the rental company will hold you responsible not only for the damage but also for the lost income from the car being out of service, any claims handling fees and administrative work, and sometimes the diminished value of the vehicle.
An independent insurance agent can help you understand your personal car insurance policy and whether or not you'll need additional protection when you rent a car. These agents can review your policy for loss-of-use endorsements and confirm your international rental coverage before you travel. And down the road, your agent can help you file claims and update your coverage when necessary.
Sources
https://www.moneygeek.com/insurance/auto/rental-car-insurance/