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
- Often, personal car insurance policies do not offer any cover for rental vehicles. You should carefully review your policy statement to understand if any coverage is offered.
- Instead, you'll need to rely on alternatives for rental car insurance that goes beyond legal minimums. This can include products offered by your rental company.
- You can also consider alternatives like RentalCover for comprehensive protection with nothing to pay in the event of an incident.
Do personal auto policies cover rental cars?
In many countries, personal car insurance policies commonly offer little to no cover for rental vehicles. You can verify this by checking your policy statement. You should also check if your cover is entirely domestic, or if it applies in any other countries.
Even if your policy does offer some level of cover, you can run into common pitfalls. For example, the same coverage limits and deductibles you have for your own vehicle will usually 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.
Your personal car insurance policy could potentially cover the following areas:
- Excess: Some cover for out-of-pocket costs you face in the event of a claim.
- 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.
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 excess makes for a more relaxing holiday.
You can consider purchasing policies from your rental company like Super Collision Damage Waivers. These policies offer comprehensive cover with a limited number of exclusions. Often, there's also no deductible for you to pay.
However, gaps in coverage often still exist, including for towing and loss of use fees.
Alternatively, consider a policy like 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.
Outside of Canada and the United States, CDWs are generally automatically included in the price of your rental vehicle. As a result, there's very little overlap between CDWs and cover from your personal car insurance.
Liability Insurance
Third party liability coverage is generally automatically included in the daily price of your rental vehicle. As such, even if your personal car insurance extends to rental vehicles, there is generally no need for it to provide any liability cover.
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. Outside of Canada and the United States, very few personal car insurance policies extend to providing Personal Accident Insurance for hired vehicles.
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.
Rental car excess insurance
While the coverage of a Collision Damage Waiver offers a solid level of protection, you can face significant out-of-pocket costs in the event of a claim. The amount you must contribute to post-claim costs is known as an excess.
It's rare for your personal car insurance policy to cover rental car excess insurance. You can confirm this by checking your policy document.
If you want coverage for your excess, you have a few options. Rental car companies offer policies like Super Collision Damage Waivers, which generally reduce your excess to zero. However, you can still face out-of-pocket costs like loss of use fees.
You can also purchase rental vehicle excess insurance from RentalCover. Our cover is 50% cheaper than equivalent cover from rental car companies, and there's nothing for you to pay in the event of a claim.†
Does your credit card offer rental car insurance?
Some credit cards offer rental car excess insurance as a benefit. If you make a claim, your credit card can offer coverage for your out-of-pocket costs.
In some cases, a credit card may also offer broader secondary coverage. This means it relies on a primary form of coverage to take effect before it "kicks in".
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.
Who else offers rental car insurance?
Here's a rundown of your other options for rental car insurance.
Rental car companies
Your rental company will almost always offer liability coverage and a CDW in the base price of your rental vehicle. This helps you meet legal minimums before hitting the road, with a solid level of basic protection.
For greater coverage, you can also purchase policies like SCDWs to cover exclusions from the basic CDW and excess costs.
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 go beyond what rental companies offer, helping you travel with more confidence on the road.
Travel insurers
Some travel insurers offer basic car rental insurance in their policies. This could include cover for your excess 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 car insurance may offer little to no cover for rental vehicles. For comprehensive protection, consider RentalCover.
With RentalCover, you have a single policy offering inclusive coverage with nothing to pay in the event of a claim. It's a simple approach for a truly relaxing holiday."
Frequently asked questions
Does Aviva car insurance cover rental cars?
Some Aviva policies include car rental excess insurance, covering some out-of-pocket costs in the event of an incident. Aviva can also offer customers temporary hire cars if they are unable to use their vehicle after a covered incident.
Does Admiral car insurance cover rental cars?
Admiral policies typically do not offer cover for damage or theft of rental vehicles. Admiral can offer customers temporary hire cars if their vehicle cannot be used after a covered incident.
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?
All the cover legally needed to rent a vehicle is generally included in the base price of your rental. As such, there is no requirement to have any external policies.
However, getting higher levels of cover from providers like RentalCover offers significantly more protection on your travels, leading to a more relaxing holiday.
Does your car insurance cover rentals overseas?
If your car insurance offers some cover for your rental vehicle, it's likely restricted to the country of issue, or some neighbouring countries with strong regulatory alignment. Check your policy statement to find out for sure.
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 travel 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.