by Brandy Abalos


Whether you rent a car while on vacation or simply drive around your hometown, you may wonder if you should buy the extra rental car insurance that the company offers. The answer to that depends greatly on what type of car insurance you already have. Some people need the additional coverage, and for others, it is a redundant expense. Read below to find out if you should buy rental car insurance. Here are some questions you need to ask before you determine if you need the extra coverage:

What types of car insurance do I need for my rental car?

You will need to have liability, collision and comprehensive coverage for your rental car. You may also want to have uninsured/underinsured motorist protection, personal injury protection (PIP) and medical payments (med pay) on your policy.

Liability insurance pays for another person’s medical bills and property damage if you cause an accident.

Collision coverage pays to repair your car (or the rental car) if damaged when you hit another vehicle or object, such as a tree or fence. You may or may not be at fault, and it will still cover your damages.

Comprehensive coverage helps pay for damage to your vehicle because of fire, natural disaster or theft.

Uninsured/Underinsured (UM/UIM) protection covers you if someone else hits your vehicle (or the rental car) and they do not have any insurance, or they don’t have enough to cover all of your losses.

Personal injury protection (PIP) is required in some states. It covers medical expenses regardless of who is at fault. It can also cover lost wages and other losses that you may incur due to injuries after an accident.

Med pay is often purchased in increments of $1,000, $5,000, $10,000 or similar amounts. It is an automatic payment to you if you get injured. When you have medical bills coming in fast after an accident, med pay can allow you to keep the bill collectors at bay quickly.

Most of these types of insurance will be purchased through your personal car insurance policy, and you will have to make sure they apply to your rental car. However, you can ask the car rental company what types of coverage they offer and whether or not you can select specific types and deny others.

Are there any insurance options specific to rental cars?

Yes. A few rental car insurance options may be called something different than on your personal car insurance policy. However, they do all cover the same things.
Some examples of rental car insurance options that you don’t have on your personal car insurance policy include:

Personal Effects Coverage – This will cover things like your laptop, clothing and other personal items if they are stolen. Home or renters’ insurance may also cover this.

Loss Damage Waiver (LDW) – This will cover the cost
of repairing the rental car if it is damaged. Your collision coverage may also cover this type of damage.

Personal Accident Insurance – This similarly covers medical bills to med pay.
Does your current car insurance cover rental cars?

If you own a car and have a personal car insurance policy, it includes liability coverage as well as any additional coverage options you’ve selected. Most personal car insurance will extend to rental cars if you only use it for personal use. However, you need to make sure your insurance covers rentals. You can do this by calling the number on your insurance card and speaking with someone in customer service.

It’s important to note that all of the same coverage limitations and deductibles that apply to your personal vehicle will also apply to your rental car. If you have low coverage limits or high deductibles, you might consider opting into the extra rental car insurance policy to cover whatever your own personal car insurance does not.

Does your credit card have rental car coverage?

Some credit cards offer insurance if you pay for your rental car using that card. You can call the toll-free number on the back of your credit card and ask your company before deciding to purchase extra coverage through the rental car agency. It’s possible that your credit card company may only offer collision coverage for your rental car. Thus, you would still need liability and comprehensive coverage. If your own personal car insurance policy does not cover those types of insurance, you can purchase the additional coverage through the rental car company. If you do, your credit card company’s insurance will likely serve as “secondary” insurance.

When Should I Purchase Rental Car Insurance?

You should buy rental car insurance before you ever set foot in your vehicle. You can verify your coverage with your personal car insurance policy and then go into the rental car company with an idea of what types of insurance you need to supplement your own. If you don’t have any car insurance at all, you will need to buy liability and the other types discussed above. However, you should

never drive a rental car off the lot without liability coverage. You might opt for the extra protection from the rental
car company’s policy if your own policy does not include comprehensive and collision coverage. This especially applies if your rental car is a newer and more expensive vehicle. You don’t want to get stuck paying for the rental car repairs if it gets damaged.
If you’re only insured under a commercial car insurance policy, you will want to purchase rental car insurance through the rental company. Your commercial policy won’t likely cover you unless you are working at the time of an accident.

If you want to avoid a high deductible and make sure you have enough of a policy limit to cover everything, you should opt into rental car insurance through the rental company.