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If you’re thinking about renting a vehicle for your next vacation, you might be wondering whether you need to purchase rental car insurance. If you don’t have a personal auto insurance policy or you’re using your rental for a business trip, you likely will need to purchase rental insurance.
Best Rental Car Insurance Providers
If you don’t already have a car insurance policy for personal use, you’ll need to buy rental car insurance before you hit the road. Consider beginning your search with a few of our favorite providers using the chart below.
Best Provider for Liability Insurance: Bonzah
Bonzah by Pablow Inc. is a unique provider offering up to 1 million in on-demand liability insurance for your rental car -- usually at a much lower rate than you'll pay for rental care insurance at the rental desk. And unlike most auto insurance coverage, you'll pay no deductibles when you're covered by Bonzah.
Bonzah is available in every American state and in almost every country worldwide. They're currently the only place online you can get on-demand primary and supplementary insurance for your rental car.
When you choose Bonzah for your rental car coverage, you enjoy the following benefits of your policy:
- Rental car damage up to $35,000
- Primary & Supplementary Liability up to $1 million
- Baggage & Personal Items up to $500
- Zero deductible
- Cancel policy within 10 days of purchase free of charge if you haven't filed a claim or left for your trip
- All eligible drivers over 21 are covered
Allianz offers something called the “One Trip Rental Car Protector” that offers powerful coverage for rental cars you use while you’re out of town. Coverage from Allianz includes:
- Collision Damage Waiver
- Trip Interruption Coverage
- Lost Personal Items
- A 24-Hour Hotline
Allianz usually charges $11 per calendar day for this coverage, allowing you to buy affordable insurance that protects you from accidents and damage along with any fees the rental company might charge after the fact.
Sure is a powerful online platform for insurance, and it offers unique coverages like rental car insurance. With coverage backed by Chubb, the company’s policies handle:
- Theft or damage to personal property
- Lost keys
- Flat tires
- Fuel charges
- Towing costs
When you use the platform, you gain several more advantages, including:
- Instant quotes
- Easy online account management
- A powerful mobile experience
- The option to customize your policy
You can download the Sure app to your phone or mobile device right away, register for an account and purchase your policy right away. You never want to be caught in a rental car without the best insurance, and Sure takes this item off your to-do list in short order.
RentalCover.com allows you to search for rental insurance anywhere you want right on the homepage. Because the site is so easy to use, you can purchase rental car insurance in a matter of moments.
The platform markets itself as being compatible with any rental car agency around the world, with coverage for:
- Flat tires, cracked windshields and other types of minor damage
- Towing costs
- Additional drivers
- Rentals lasting longer than 30 days
Plus, RentalCover.com does all this without a deductible so that you can use this coverage and avoid bringing your car insurance company into the situation.
What is Rental Car Insurance?
Rental car insurance is a type of coverage that offers financial protection from the risks of driving a rental car. This is a subtype of non owners car insurance, which protects drivers operating vehicles that they don't not own or that are not registered to them. You may be able to purchase rental car insurance from your car insurance provider; typically, rental car coverage isn't part of your regular policy unless specifically specified. You may also be able to purchase it from a rental car company at the purchase desk or from a provider like Bonzah.
Types of Rental Car Insurance
Here are some common types of rental car insurance you may want to explore.
Liability insurance is a type of insurance coverage that compensates anyone who you injure or whose property you damage during an accident. Most states require you to carry at least a certain level of liability insurance to remain on the road legally. If you have a personal auto insurance policy, you most likely already have both bodily injury liability coverage and property damage liability coverage.
Collision coverage is a form of car insurance that compensates you for damage done to your own vehicle — in this case, your rental car. If you don’t purchase collision insurance, you will likely be held responsible for any damage your rental car incurs while in your possession. If you have collision coverage on your personal auto insurance policy, it may extend to any rental cars you use.
Comprehensive coverage is a type of auto insurance that compensates the owner of the vehicle if the automobile is damaged outside of the context of a collision. Some common examples of situations that fall under comprehensive coverage include theft, vandalism and damage from lightning. Like collision coverage, comprehensive coverage is an important protection for rental car drivers because you may be held liable for any damage or theft that happens when the vehicle is in your possession.
Using Credit Card Benefits for Rental Car Insurance
Many credit cards offer some sort of rental car coverage, but each card varies in what is actually covered. Major credit card service providers such as American Express and Mastercard offer insurance when you rent a vehicle, but the specific coverages you’ll receive will vary by provider.
Credit cards can offer coverage for the collision damage waiver or loss damage waiver when you rent a vehicle, which can be costly if you’re involved in an accident that damages your rental vehicle. Some cards also cover towing expenses and other miscellaneous fees associated with renting a vehicle. Coverage from credit cards comes in 2 forms: primary and secondary coverage.
Coverage from your credit card is usually secondary to any other insurance you may have. This means it won’t be used until you’ve exhausted any type of insurance coverage you already have that extends to rental cars. For example, if your personal auto insurance policy extends to the use of rental cars, this is your primary insurance, and your insurance from your credit card is your secondary insurance. If you don’t have any other form of auto insurance, the coverage from your credit card becomes your primary source of coverage.
Rental car companies sometimes may seek something called a “loss-of-use” fee. This is the compensation for what the company could be receiving if they were renting the car that is now out of commision because of you. Some credit card networks offer coverage and will pay these fees, but some do not and will leave you responsible for any loss-of-use fees you run into.
Credit card networks generally only offer coverage for rental cars over a limited period of time. If you’re traveling for longer than the limit on your card, you’ll need to find rental car insurance coverage elsewhere. Coverage can be applied in other countries, but in most instances, you’re limited to driving in the United States and Canada. Consult with your credit card provider to learn more about what is and isn’t covered under your card’s benefits.
Adding Rental Car Coverage to Your Car Insurance
In addition to the basic liability coverage that extends to your rental vehicle, you may be able to add extras onto your insurance through the rental company. Some types of extra coverage you may find include:
- Collision or loss damage waiver: A collision or loss-damage waiver isn’t technically insurance. However, it can protect you if you’re involved in an accident, and you don’t have collision or comprehensive coverage on your personal insurance policy. This waiver will cover any damage you cause to the rental car when driving. Collision and loss-damage waivers usually don’t apply if you were speeding or driving on unpaved roads when the damage occurred.
- Personal accident insurance: Personal accident insurance helps you pay for your own medical bills and the medical bills of anyone driving in your rental car with you if you’re involved in an accident. If you have health insurance or personal injury protection from your car insurance provider that extends to rental cars, this may be a redundant protection.
- Personal effects coverage: Personal effects coverage compensates you if items are stolen from your rental car. For example, if you leave your laptop on the seat of your rental car and someone smashes the window and leaves with it, your personal effects coverage will help you cover the cost of a new laptop up to your policy limit.
Which car insurance extras are worth investing in when you’re renting a vehicle? The answer will vary depending on the types of coverage you already have. For example, if you have renters or homeowners insurance, you probably already have personal property coverage that would make personal effects coverage redundant.
Rental Car Insurance Without Exception
For the most part, your personal car insurance will cover you while driving a rental car. Some credit cards offer rental car insurance. However, there are limitations to every car insurance policy. For example, your personal auto insurance likely only covers the use of rental cars when you’re driving them for personal use. This means that if you’re on a business trip, your personal auto insurance may not cover you.
Check with your insurance agent before you rent a vehicle. The last thing you want is to think you’re covered, get into an accident and find out that your insurance isn’t valid.
What to Do Before Renting a Car
Before renting a car, check what insurance you already have. You can call your auto insurer, your credit card company, your health insurance provider and your homeowners insurance company to learn more about where each coverage applies.
Remember, if you have personal auto insurance and additional insurance for medical accidents and personal possessions, you might not need to purchase rental car insurance.
Primary or Secondary Rental Car Coverage
Rental car coverage can come in 2 different forms: primary and secondary. Primary coverage is less common when it comes to credit card benefits. However, if you own one of the rare credit cards that offers primary coverage on rental cars, you can avoid contacting your auto insurance and filing a claim if you’re involved in an accident. This can help you avoid an increase in your auto insurance premiums when you renew your policy.
Secondary coverage is generally what credit card networks tend to offer. Secondary coverage only covers what your personal auto insurance coverage is not covering. Therefore, you usually need to put in a claim with your auto insurer first. Your personal auto insurer may increase your rates after being involved in an accident.
Chase provides primary rental insurance on certains cards, such as the Chase Sapphire Preferred Card and the Chase Sapphire Reserve Card. If you use rental vehicles for business purposes, you may be able to claim primary coverage through select Capital One business cards. This coverage doesn’t extend to personal auto insurance rentals.
American Express usually doesn’t offer primary coverage with its cards, however, all American Express cardholders have the option to purchase rental car insurance for an added fee per rental. Certain credit card networks may offer coverage only in certain countries, specifically in your country of residence.
Do I Need to Buy Rental Car Insurance?
Just like when you drive a vehicle at home, you must have insurance when you drive a rental car. The good news is that you may already have rental car insurance and not even know it. You can make a few calls and determine the kind of rental car insurance you already have, and you can purchase it at the rental car counter if you don’t already have sufficient coverage.
Rental insurance effectively reduces your risks while renting a car. For example if you are a non-owner and don’t have your own auto insurance, then rental car insurance is your best friend, especially in case you have an accident while on a rental trip.
We consider full coverage to be when a renter has primary damage, primary liability and supplemental liability for the rental, at a cost $38 per 24hrs. That covers $35K in damage to your rental car, $60K in liability damage/injury to others in the state of NY. And the icing on the cake is supplemental liability that covers you from $60K up to a $1M aggregate in NY (liability coverage levels differ throughout the US)
You know the term “that sinking feeling?“, well that’s what you get if you damage a rental car without having rental car insurance. Most rental cars are valued at $20-$40K, therefore having an accident without insurance could really set you back financially. That’s why we strongly recommend buying sufficient levels of coverage, to ensure you have peace of mind.
It depends!? How many people actually read the fine print & understand if their auto insurance covers a rental car? For those who are covered by their own auto insurance, they can breathe a sigh of relief. However, many owners of vehicles will still decide to buy rental car insurance because they want to avoid a potentially large deductible or a painful premium hike if they were to have an accident while renting.
For those whose auto insurance explicitly doesn’t cover rental cars, they may purchase supplemental auto rental reimbursement coverage that actually pays for the cost of renting a car while your personal auto is being repaired after an accident has taken place.
Nowadays rental car companies are reluctant to rent a car to a person who does not have adequate insurance. This is understandable given a renter could cause $10-$20K in damage to the rental car, and not personally have the funds to pay for the damage repairs. So if you are renting a car and don’t have adequate insurance, don’t be surprised if you get turned away at the rental counter, or be required to purchase very expensive (2-3 x more expensive) insurance directly from the rental provider.
Many higher end credit cards do include rental car insurance, though there are always caveats. For example the rental period might be capped at 7-10 days. And very importantly even the highest end credit cards do not cover liability risks e.g. injuring other people or damaging other people’s property, for example.