When hiring a vehicle, it can be difficult to understand the insurance rental companies offer, and how it may intersect with your personal car insurance or credit card coverage.
In our complete guide, we'll break down the types of insurance rental car companies automatically include in the cost of your hire car, and what else you need to know to be fully protected.
Key takeaways
- Your rental vehicle will almost certainly come with some level of insurance automatically included, including third party liability coverage and damage protection.
- Rental companies also offer a wide range of additional policies to purchase, including excess insurance and damage protection policies with fewer exclusions.
- You have other options to cover your rental vehicle in a more straightforward and comprehensive way, including external rental insurers like RentalCover.
Do rental cars include insurance?
Your rental vehicle will almost always come with some level of insurance automatically included. Here's what you need to know.
Do rental cars come with theft and damage insurance?
Rules vary from one country to the next, but rental car companies generally include Collision Damage Waivers (CDW) in the daily price of your rental vehicle.
This means you have some cover for damage to your rental vehicle. However, these policies often have a long list of exclusions and a large excess to pay in the event of a claim.
Collision Damage Waivers can also cover theft of your rental vehicle, in which case they may be known as Loss Damage Waivers (LDW).
Do rental cars come with liability insurance?
Third party liability insurance provides cover for injuries to third parties and damage to their property. Rental car companies are generally required to automatically include liability insurance in the daily cost of their rental vehicle.
This means you have coverage for injuries you may cause to third parties and damage to their property in an accident for which you are at fault.
Optional additional rental car insurance
In addition to basic liability insurance and a CDW, your car rental company may offer additional policies for you to consider purchasing. These can include:
- Super Collision Damage Waiver: The basic CDW your rental company offers is likely to contain many exclusions for types of damage and administrative fees. A Super Collision Damage Waiver is a more expensive and comprehensive policy that covers some of these exclusions. They also usually reduce your excess (the amount you pay out-of-pocket for a claim) to zero.
- Personal Accident Insurance: Personal Accident Insurance offers cover for the drivers of a rental car and their passengers for accidental medical costs, emergency care and accidental death during your trip.
- Personal Effects Insurance: Personal Effects Insurance offers cover for personal items if they are damaged or stolen in a rental vehicle. It can cover items like clothes, electronics and jewellery.
Who else offers rental car insurance?
It's important to remember that your car rental company is far from your only option for purchasing rental vehicle insurance. Here are a few alternatives you should keep in mind.
RentalCover
At RentalCover, our entire focus is rental vehicle insurance. We offer policies that are more comprehensive than car rental companies, while also being 50% cheaper.†
Our policies cover items rental companies commonly exclude like:
- Multi-vehicle accidents.
- Full fire, theft and vandalism cover.
- Towing.
- Lockouts.
- Car key cover.
- Windscreens.
- Headlights.
- Tyres.
- Underbody damage.
Plus, you'll have no excess to pay in the event of a claim. Get a quote today and find out how we can offer superior coverage for your travels.
Credit cards
Some credit cards also offer rental vehicle insurance. This can include cover for rental vehicle excess costs.
Credit cards can also offer broader, secondary coverage. Secondary coverage won't "kick in" until a different, primary insurance policy takes effect.
Using secondary coverage can result in long waiting periods in which you are out of pocket. Credit card coverage can also have extensive exclusions, including underbody damage, headlight damage, towing costs and more.
Travel insurance
Some level of rental car insurance can also be an inclusion for some travel insurance policies. This could include cover for your rental car's excess.
This cover can have many exclusions and may be capped at a price well below what rental companies charge. You could also find yourself facing long waiting periods for reimbursement from your travel insurer.
Do I need rental car insurance when hiring a car?
Most countries around the world have legal set-ups that mean everything that's legally required for you to hit the road is automatically included in the daily price of your rental vehicle. That means that in order to meet legal minimums, you don't need to worry about having any other cover.
However, having other policies, such as one offered by RentalCover, can offer much more comprehensive protection. It can also save you from needing to pay a large out-of-pocket fee when making a claim.
Carefully review the cover that your rental vehicle company automatically includes in their pricing, and determine what else you need to buy to feel truly protected.
Get superior coverage with RentalCover
Want a simple approach to rental car insurance that offers real protection? With a RentalCover policy, you get more substantial cover than what rental companies offer, at 50% of the cost.† This means you can say "no" to hard sells at the rental desk.
Get a simple, single policy from RentalCover and travel with true peace of mind.
Hear from our rental car insurance expert
"Your rental vehicle will generally come with some level of insurance automatically included. However, it's important to carefully review the protection it actually offers.
Purchasing a policy from RentalCover can offer significantly better cover at a more affordable price. Make sure to weigh all your options before making a decision and kicking off your holiday."
Frequently asked questions
What is car hire excess insurance?
Car hire excess insurance offers financial protection if things go wrong when driving a rental vehicle. Outside of the United States and Canada, the price of your car rental usually includes the cost of a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW).
Your CDW/LDW reduces your liability if your rental car is damaged or stolen. It's similar to basic insurance, covering you for some damage to your rental vehicle. However, it typically comes with a high excess, meaning you can face significant out-of-pocket costs.
Car hire excess insurance provides protection for this high excess. You can buy this cover from your car rental company at the rental desk. However, you can also choose an alternative provider who may offer a better deal for you.
What is a Collision Damage Waiver (CDW)?
A Collision Damage Waiver (or Loss Damage Waiver) is a type of car insurance that reduces your liability for damages to a rental vehicle if it is damaged or stolen.
A CDW is a waiver that transfers the risk of financial loss for damages like towing and administrative fees to the rental company. CDWs often come with high excess costs.
Outside of the United States and Canada, CDWs are typically included in the basic cost of your car rental.
What is secondary rental car insurance?
Secondary rental car insurance refers to coverage that comes into effect after your "primary coverage". It provides additional cover on top of this primary coverage.
In the case of credit card rental car insurance, your primary insurance is generally your personal auto insurance. So, your credit card rental car insurance will come into effect after your primary insurance.