Last updated: June 20, 2025
Guide to Rental Car Insurance Coverage
If you already have car insurance, should you buy more insurance for a rental car?
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If you’ve ever rented a car, you know the experience of being offered different insurance services at the rental counter. You may wonder what these coverages entail and whether your current auto insurance covers rental cars already. This guide explains rental car reimbursement coverage on your regular auto insurance and the add-ons from the rental company. Bottom line, if you already have comprehensive and collision coverage, buying extra coverage for a rental car is generally unnecessary.
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Rental Car Coverage vs. Rental Car Insurance
First, let’s differentiate between insurance for a rental car (rental car insurance) and rental car coverage. While these terms sound similar, they’re actually two different things. One is your existing personal auto insurance, which may include rental car reimbursement, and the other is insurance from the rental company.
What Is Rental Car Coverage?
Rental car coverage is optional coverage from your personal auto insurance policy that pays for renting a car while your vehicle is being repaired under a covered claim. This differs from the coverage for a car you are renting and driving in a non-repair situation. This coverage must be added, as minimum coverage does not include rental car reimbursement.
If you added this coverage and your car is being repaired under a covered claim, your insurer will pay for your rental car. In other words, you won’t have to pay a company like Enterprise out of pocket in order to rent a car.
What is Rental Car Insurance?
Rental car insurance is the optional insurance an employee at a rental counter offers you when you rent a car. However, you should know you are not obligated to purchase any additional rental car coverage from the rental company.
Do You Already Have Rental Car Insurance?
If you have collision or comprehensive coverage, it extends to rental cars and your own vehicle. Additionally, some credit cards, like those from Chase, Capital One, and American Express, offer rental car insurance.
| Bank | Chase Credit Cards | Capital One Credit Cards | American Express Credit Cards |
|---|---|---|---|
| Type of Coverage | Primary | Primary (Venture X); Secondary (others) | Secondary; Primary with Premium Car Rental Protection |
| What’s covered |
|
|
|
| Coverage Limit | Cash value of the rental vehicle | Up to $75,000 for Venture X | Up to $75,000 for Platinum Card; $50,000 for Delta SkyMiles Blue |
| Rental Period | Up to 31 days | 15 days in country; 31 days abroad for Venture X | Up to 30 days |
| Eligibility Requirements | Charge full rental cost to card; decline rental insurance | Charge full rental cost to card; decline rental insurance | Charge full rental cost to card; decline optional coverages |
TIP
Check if your credit card offers primary or secondary coverage. With primary coverage, your credit card policy will pay out before your auto insurance company, and vice versa with secondary coverage.
Do You Need Rental Car Insurance?
Consider rental car insurance if:
- You don’t have a car insurance policy or another source of coverage (e.g., credit card)
- Your current policy lacks comprehensive and collision coverage
- You’re insured only under a commercial policy
- You want to avoid paying a high deductible
- You’re renting abroad, excluding Canada
If you already have comprehensive coverage, purchasing additional insurance at the rental counter will only duplicate your existing coverage.
What Rental Car Insurance Covers
Rental car insurance from the rental company can cover:
- Bodily injury liability
- Property damage liability
- Collision coverage
- Comprehensive coverage
- Medical bills coverage
- Roadside assistance
- Loss of use of the car (reimbursing the rental company for the revenue lost while the car was being repaired)
- Personal items stolen from the car in an auto burglary
If you add additional drivers to the rental agreement, your rental car insurance will also cover them.
Types of Rental Car Insurance Coverage Options
To avoid making a financial decision on the spot, before you rent your car, familiarize yourself with what the rental company will offer you in terms of coverage. These include:
- Liability coverage: Liability coverage includes bodily injury and property damage liability insurance.
- Collision/loss damage waiver/damage waiver (LDW, CDW, or DW): The DW isn’t technically insurance; it’s a waiver that states that if you damage the rental car, it could help cover the cost of the repairs.
If you don’t have DW or collision/comprehensive coverage and damage the rental car, you’ll have to pay for repairs out of pocket. Additionally, the rental company could charge you for loss of use, which is the revenue it lost while the car was being repaired.
NOTE
A damage waiver won’t cover damage from speeding or driving on unpaved roads.
- Personal effects coverage (PEC): PEC covers theft of any personal belongings such as a laptop or clothing. If you have homeowners’ or renters’ insurance, the personal property coverage may cover some of these thefts under “off-premises coverage.”
- Personal accident insurance (PAI): PAI will cover you and your passengers’ medical bills from a rental car accident, but your health insurance, medical payments coverage, or personal injury protection may already cover medical expenses.1
- Supplemental liability protection (SLP): SLP provides the renter and authorized drivers with a combined single limit of $300,000 for any third-party liability claims, or claims from another driver after an at-fault incident.
- Roadside assistance protection (RAP): Roadside assistance eliminates your financial responsibility for events like lockouts or fuel outages.
Rental Car Insurance Cost
On average, rental insurance costs $40 a day, ranging from $11 at Allianz to $56 at Hertz and Rental Cover. Most rental car companies don’t list the costs of these add-ons, and prices differ by location and vehicle type.
| Rental car company | Avg. daily cost of rental insurance | Damage waiver daily price range | Personal accident insurance daily price range | Personal effects coverage daily price range | Supplemental liability protection daily price range | Roadside assistance protection daily price range |
|---|---|---|---|---|---|---|
| Alamo | $44 | $10.99-$500 for rentals originating in California, but depends on the type of vehicle and location | Not listed | Not listed | Not listed | Not listed |
| Avis | $36 | $9 minimum | Not listed | Not listed | Not listed | Not listed |
| Budget | $44 | $9 minimum | Not listed | Not listed | $15 | Not listed |
| Enterprise | $54 | Varies by location and vehicle type | No longer offered | $5.99-$15.67 | $8-$17 | Not listed |
| Hertz | $56 | Not listed | Not listed | Not listed | Not listed | Not listed |
| National | N/A | $10.99-$500 per day for rentals originating in California, depending on the type of vehicle | Not listed | Not listed | Not listed | Not listed |
Who Can Rent a Car?
Young drivers can rent cars, but fees ranging from $19 to $84 a day, with an average of about $36 per day, apply for those under 25. Here’s a summary of minimum ages and fees:
| Rental car company | Minimum age to rent a car | Young driver fees |
|---|---|---|
| Alamo | 21 (18 in Michigan and New York) | Around $25 a day for drivers age 21 to 24, depending on location |
| Avis | 21(18 in Michigan and New York) | Depends on age and other factors except in Michigan and New York
Michigan: Drivers 18-20 will pay $41 per day; drivers 21-24 will pay $28 per day New York: Drivers 18-20 will pay $84 a day; drivers 21-24 will pay $35 a day |
| Budget | 21(18 in Michigan and New York) | $27 per day in most locations |
| Dollar | 20 (18 in Michigan and New York) | Varies based on car class and location |
| Enterprise | 21(18 in Michigan and New York) | Michigan: Drivers 18-20 will pay $36.50 per day; drivers 21-24 will pay $15.75 a day
New York: Drivers 18-20 will pay $64.75 per day; drivers 21-24 will pay $30.75 a day All other states: Drivers under 25 will pay about $25 a day; varies based on location |
| Hertz | 20 (18 in Michigan and New York, 19 in Alabama and Nebraska) | For renters under 25, a $19-per-day fee |
| National | 21(18 in Michigan and New York) | For drivers ages 21-24, the fee is about $25 per day; varies by location |
| Thrifty | 20 (18 in Michigan and New York) | Drivers under 25 will pay a fee based on renting location and car class |
The most expensive place for drivers 18 to 20 years old to rent cars is New York, with an $84 daily addition from Avis, in particular.
FYI
The legal minimum age for car rental is 21 in every state except New York and Michigan, where the minimum age is 18.
Although car rental companies can discriminate by age, in New York, they’re not allowed to discriminate by race, religion, disability status, ethnicity, color, or sex.2 Check your state laws to make sure car rental companies treat you fairly and legally.
Bottom line
Don’t feel pressured at the rental counter. If you already have collision and comprehensive coverage, buying add-ons is unnecessary and expensive. However, if you lack auto insurance or other types of duplicate insurance, the add-ons could be worth it, especially if you damage your rental car.
To give yourself peace of mind, check with your current insurance policies and credit card terms to see if you’re already covered and check out the best auto insurance for rentals to see our top picks.
Frequently Asked Questions
GEICO covers rental cars if you have collision/comprehensive insurance. If you have rental car reimbursement, you can rent a car for free if your car is being repaired under a covered claim.
Your insurance policy determines how long it will pay for your rental car, but the period is typically around 30 days. Check your policy or ask your agent to find out the time limit.
Auto insurance covers a rental car if you have collision and comprehensive coverage, meaning you can get bodily injury and property damage liability for your rental car. You can get auto insurance to pay for a rental car if your car is being repaired for a covered claim and you have rental reimbursement coverage.
You do not need insurance to rent a car from Enterprise, as Enterprise legally has to insure all of its cars. However, if you do not have personal car insurance from your policy or credit card and you damage your rental vehicle, you’ll be responsible for all property damage, bodily injury payments, medical bills, and loss of use costs.
Citations
Should You Buy Extra Rental Car Insurance At The Counter? Allstate. (2020, May).
https://www.allstate.com/tr/car-insurance/rental-car-insurance.aspxCar Rental Tip Sheet. NY Attorney General. (2022).
https://ag.ny.gov/consumer-frauds/car-rental-tip-sheet
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