When you hire a vehicle, you'll often be pushed to purchase rental car insurance at the desk. But do you really need it?
In this guide, we'll explain whether your personal car insurance can cover your rental vehicle and what you need to know to be truly protected on the road.
Key takeaways
- Your personal auto insurance policy may offer some cover for rental vehicles in Canada and the United States.
- This cover can have significant limitations, including coverage caps that aren't high enough to provide proper protection.
- You should consider alternatives like RentalCover for comprehensive protection with nothing to pay in the event of an incident.
Do personal auto policies cover rental cars?
Yes, in Canada and the United States, personal auto insurance policies generally offer some level of cover for rental vehicles. Policies issued in Canada and the United States often offer cover for both countries, but not any others.
Usually, the same coverage limits and deductibles you have for your own car will also apply for your rental car. So, if you're renting a car that's more expensive than your usual vehicle, your policy's coverage limits may be too low to offer significant protection.
While your personal auto insurance may offer some cover for your rental vehicle, it often won't cover things like loss of use fees charged by rental companies. For a full overview of what your personal auto policy covers, make sure to check your policy document or contact your insurer directly if you have any questions.
Your personal auto insurance may cover the following areas:
- Liability coverage: Cover for injuries and property damage caused in an accident for which you are at fault.
- Vehicle damage: Damage to a rental vehicle caused by collisions and other covered events.
- Theft: Cover if your rental vehicle is stolen.
- Deductible: Some cover for out-of-pocket costs you face in the event of a claim.
Do you need additional rental car insurance?
While your personal auto insurance may offer some cover for your rental vehicle, you can also benefit from an additional rental insurance policy. More comprehensive coverage with few exclusions and a lower deductible makes for a more relaxing holiday.
You could consider purchasing a policy from your car hire company such as Collision Damage Waiver (CDW). These policies may offer some coverage for collision damage, theft and more.
However, these policies often have exclusions such as damage to tires, windshields and the vehicle underbody. Other gaps in coverage can include towing, lockouts and loss of use fees. You can also purchase more comprehensive policies known as Super Collision Damage Waivers (SCDWs).
Alternatively, consider a policy from RentalCover. Our policies go beyond what the rental companies offer, with cover for a wide range of damage events, towing, lockouts, loss of use and more.
Plus, there's nothing for you to pay in the event of a claim. We offer cover that's 50% cheaper than equivalent policies from rental companies.†
Get a quote today and enjoy more peace of mind on your next holiday.
What does rental car insurance cover?
Here's a broad overview of rental car insurance, and the type of coverage you could get from a personal auto insurance policy.
Collision Damage Waivers
Collision Damage Waivers are not technically insurance. They actually function by transferring the risk of financial loss for damage to a rental vehicle to the car rental company.
Your personal auto insurance may offer similar cover to a Collision Damage Waiver, enabling you to refuse it from your car rental company. Most CDWs, or equivalent cover from your personal auto policy, cover basic damage from single and multi-vehicle accidents.
For more comprehensive cover with fewer exclusions, you may need to look beyond personal auto insurance to policy providers like RentalCover.
Liability Insurance
The base price of your rental vehicle will often include some level of third party liability insurance. This is not the case in all states.
If there is no third party liability insurance included in the price of your rental vehicle, you will likely need to rely on your personal auto insurance policy to provide cover. Your personal auto policy will often include liability coverage for injuries you cause to others or damage to other people's property.
Alternatively, you can purchase Supplemental Liability Insurance from RentalCover or your car rental company. It offers increased liability coverage, often up to $1,000,000.
Personal Accident Insurance
Personal Accident Insurance offers cover for medical and death-related costs relating to drivers and their passengers due to accidents in a rental vehicle.
Your personal auto insurance may include similar cover under names like "Medical Payments Coverage" and "Personal Injury Protection". This cover usually extends to your travels in a rental vehicle.
Make sure you double check your personal auto insurance’s policy document to verify your coverage.
Personal Effects Insurance
Personal Effects Insurance, also known as Personal Effects Coverage, offers cover for personal belongings in your rental vehicle such as clothing, electronics and jewellery. It kicks in if your personal items are stolen or damaged in a rental vehicle.
This type of coverage is almost never provided by your personal auto policy when using a rental vehicle. If you want this insurance, you can often purchase it from your rental company.
Does your credit card offer rental car insurance?
Many credit cards offer rental car insurance coverage as a benefit. These policies are usually secondary, meaning they rely on a primary form of coverage to take effect before they "kick in".
If you have credit card rental car coverage, your personal auto insurance is often your primary coverage. Here's how the process often works:
- After an incident occurs, your rental car company charges you for the associated costs.
- Your primary coverage through your auto insurer kicks in. You can file a claim with them to cover the costs you've incurred.
- You then file a claim with your credit card company to receive coverage that your primary insurer doesn't cover. This could include your remaining deductible, charges that exceed your policy limit, or loss of use fees.
Credit card insurance may default to being primary insurance if you're traveling overseas and your auto insurance policy doesn't apply.
Who else offers rental car insurance?
Here's a rundown of your other options for rental car insurance.
Rental car companies
Rather than relying on your personal auto insurance, you can instead purchase cover like a CDW or a SCDW from your car rental company. If you do have coverage from your personal auto insurance policy, you should carefully review your protections and determine if policies from your car rental company offer anything additional.
Personal auto insurance often overlaps heavily with basic rental car company policies, but you may want to purchase more comprehensive policies like a SCDW to enjoy greater peace of mind.
RentalCover
Alternatively, a RentalCover policy can provide you with coverage that's more comprehensive than the car rental companies at 50% of the cost.† RentalCover policies significantly exceed what your personal auto insurance covers for rental vehicles, helping you travel with confidence on the road.
Best of all, there's nothing for you to pay in the event of a claim, and you don't need to worry about any impacts on your personal insurance premiums.
Travel insurers
Some travel insurers offer basic car rental insurance in their policies. This could include cover for your deductible in the event of a claim.
These policies typically have many exclusions and low coverage caps. They can also lead to long waiting periods where you're out-of-pocket.
Overall, coverage through a travel insurance policy can be a decent bonus, but the protection offered doesn't stack up to alternatives like RentalCover.
Cover your rental vehicle with RentalCover
If you don't have a personal auto insurance policy, or you aren't confident in the coverage it provides, consider a policy from RentalCover.
Our policies have fewer gaps than other forms of insurance. They’re also 50% cheaper than equivalent cover from car rental companies.† There's nothing for you to pay in the event of an incident, helping you travel with true peace of mind.
Get a quote today and kickstart the road trip of your dreams.
Hear from our rental car insurance expert
"Your personal auto insurance policy may offer some cover for rental vehicles. However, this cover can have significant gaps you need to be aware of. Check your policy document for more information.
If you want a simpler approach to rental car insurance that's also more comprehensive, consider RentalCover. With RentalCover, you have a single policy offering inclusive coverage with nothing to pay in the event of a claim."
Frequently asked questions
Does State Farm car insurance cover rental cars?
Yes, some State Farm car insurance policies can extend to rental vehicles. Review your policy document to understand all conditions of coverage and levels of protection.
Does Progressive car insurance cover rental cars?
Yes, some Progressive car insurance policies can extend to rental cars. Read your policy document to understand how your coverage extends to rental vehicles.
Does USAA car insurance cover rental cars?
Yes, some USAA car insurance policies can cover rental cars. Check your policy document to understand how your coverage works.
Does Geico car insurance cover rental cars?
Yes, some Geico car insurance policies can cover rental cars. Review your policy document so you can understand how your level of coverage covers hire cars.
Does your car insurance cover replacement hire cars while your car is being repaired?
Replacement hire cars are a common inclusion in many car insurance policies. If your vehicle cannot be driven due to a covered event, your insurer may offer a hire car for a short period of time.
Check your policy document or contact your insurer directly to find out how this coverage works for you.
Do you need car insurance to rent a car?
It's not essential to have a personal auto policy to rent a car in Canada and the United States. Instead, all the cover you legally need can be purchased from your car rental company or a provider like RentalCover.
Does your car insurance cover rentals overseas?
Generally, personal auto policies in Canada and the United States don't extend to offering cover for rental vehicles overseas. If you have rental vehicle cover from your personal auto insurance, it will generally apply on both sides of the Canada-US border.
How should I evaluate my rental car insurance needs?
Your rental car insurance needs come down to factors including:
- What coverage you already have from other forms of insurance like your personal auto insurance.
- The amount of money you could be on the hook for if things go wrong when you're driving.
- The environments you'll be driving in and your personal risk tolerance.