Rental Car Insurance: The World’s Easiest Guide to Insuring Your Rental Car

Rental car insurance may be necessary to meet state insurance requirements. Rental car insurance providers can include your car insurance policy, your rental car credit card, or a loyalty program. Car rental insurance rates typically range between $9.00 and $35.99 per day. Don't rely on last-minute car insurance decisions. Be prepared when the car rental company offers insurance options. Start reading to learn more.

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UPDATED: Jan 19, 2021

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jan 19, 2021Fact Checked

Here's What You Need to Know

  • You must carry car insurance to drive
  • Your existing car insurance policy may cover you in a rental vehicle
  • Your credit card may offer car insurance coverage
  • You may be able to receive loyalty rewards on car rentals

For most people, the worst part about renting a car is the last step: when the agent presents you with an expensive, confusing list of options for rental car insurance.

Most of us feel we need to have a master’s degree in car rental insurance to figure this stuff out!

After all, it’s not in the rental company’s interest to make it simple—so we’ve done it for you. Understanding your car insurance policy can help you determine whether or not you’ll need to purchase additional coverage.

Sure, rental car insurance can be confusing. But we can help you find affordable rental car insurance quotes.

Still asking, “How should I insure my rental car?”

Read more to learn all about how car rental insurance works, how to compare car rental insurance rates, and then be sure to enter your ZIP code in our free tool to get a free quote today.

Car Rental Insurance

You know that in order to legally drive, you’re required to meet at least the minimum liablity coverage set by the state in which you’re driving. What is liablity coverage? Watch this video for more.

So do you need car rental insurance? Which rental car insurance providers should you consider purchasing insurance from? Does your car rental company offer insurance? Can you get rental car insurance online?

Keep reading to find out the answers to these and other questions regarding insuring your rental car.

Do You Really Need Car Rental Insurance?

Make no mistake, you will be asked if you want insurance for your rental car. Yearly car insurance for rental cars is not typically available. Instead, it’s usually charged by the day or the week. Here are some daily car rental insurance rates by company:

Daily Car Rental Insurance Rates by Company
Insurance CompaniesLoss Damage Waiver Cost per DaySupplemental Liability Insurance Cost per Day
Dollar$8.95 - $34.99$8.95 - $12.99
Thrifty$8.95 - $34.99$8.95 - $12.99
Hertz$9.00 - $35.99$10.95 - $12.95
Avis$9.00 - $35.99$10.95 or $12.95
Budget$9.00 - $35.99$10.95 or $12.95
Enterprise$10.00 - $15$10.00 - $16
Alamo$10.50 - $22.99$11.95 - $12.95
National$10.50 - $22.99$11.95 - $12.95
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As you can see, rates vary by company, and even for a given company, daily rates can vary by as much as $20.

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Rental Car Insurance Definitions

According to the Insurance Information Institute, loss damage waiver (LDW) covers you from liability if a car is damaged in any way or stolen. There are limitations, however, and if the damage is the result of poor driving (like speeding, for example), the waiver may be voided.

Supplemental liability insurance protects you from lawsuits by victims of accidents involving a rental.

When you buy rental car insurance, you need the proper amount of coverage.

Multiply the daily rate for coverage by the number of days you’re going to have the car, and you can see how expensive rental car insurance can be.

But don’t worry, just follow these simple steps detailed below, and you’ll know the answer to the question, “Do you want insurance with your rental today?” before you even step to the counter.

And maybe even be able to negotiate cheap rental car insurance rates.

Step One: Personal or business?

If you’re renting your car on business, you may be covered under your company’s insurance policy, in which case you likely won’t need to worry about the rental car business insurance costs.

Before you leave, find out from your corporate travel department if car rental insurance is covered.

It’s possible that you may need to be added to the policy by providing a photocopy of your driver’s license. Your company has to have some type of insurance, so it pays to find out.

If your trip is personal, read on.

Step Two: Are you covered under a current policy?

You’re already paying for car insurance because that’s the law. Find out if your car insurance policy covers rental cars.

If it doesn’t already, you may be able to get a better deal by adding it to your policy, rather than getting it at the last-minute from a rental company.

Here are some tips:

  • Ask your agent – Find out your options from your insurance agent, or go to their website to find out more
  • Look into non-owners auto insurance – If you don’t own a car, it is possible to get non-owners insurance through your standard insurance provider
  • Check your homeowner’s policy – Since it is usually cheaper to buy all of your insurance as a package with one insurer, you may save money buying rental insurance

Make sure you check all the insurance policies that you have since you may be covered and not even know it.

Step Three: Does my credit card cover car rental insurance?

Many credit card companies offer car rental insurance as a benefit. This is most commonly found on cards that offer regular benefits as part of an annual fee—American Express is the best-known example.

To find out if your card offers car rental insurance, just call the phone number on the back of the card.

Make sure you go beyond just asking if rental insurance is offered, however. Sometimes these car rental policies are just secondary to regular insurance, such as supplemental liability.

Find out for what and how much coverage you have before you hang up the phone with customer service.

Step Four: Be Loyal

Just like airlines, car rental companies have loyalty programs. Along with the programs come special benefits like rental car insurance for good rates, or as part of an annual fee.

If you’re a power traveler—or are planning to become one—find out whether these loyalty programs can benefit you. You’ll probably be surprised by the perks and not just rental insurance benefits.

This is especially true if you plan on renting cars in another country.

Sometimes it’s easier to work with the rental company than with your own insurer since they will be more familiar with the laws regarding insurance in that particular country.

If you’re renting a car out-of-state and are wondering about rental car insurance, insurance rules should stay the same as the state where you are from.

Step Five: How to Save Money on Car Rental Insurance

At this point, if you’re not covered by the steps above, you need to accept some insurance from the rental company, or a third-party rental car insurance company, to make sure there are no out-of-pocket expenses if something happens to your car.

It’s possible that your credit card or other insurance policies already offer the supplemental liability insurance benefit, so if you must have some sort of collision insurance, go with the loss damage waiver.

The car rental company is likely going to offer you various levels of coverage; just take the cheapest one that will cover you from common scratches and dings.

Finally, of course, drive carefully. The best way to save money on insurance is not to get into any accidents!

The Bottom Line for Car Rental Insurance

When you’re looking for the best rental car insurance, there are a few things to keep in mind:

  • In most cases, insurance is required in order to legally drive
  • Check with your regular car insurance provider to find out if you’re already covered when you rent a car
  • If your existing car insurance doesn’t cover you when you rent a car and you either can’t or don’t want to purchase coverage from the rental company, you may be able to obtain car rental coverage through your credit car company

Make sure to compare rates from potential providers to make sure you’re getting the best cheap car rental insurance in the USA for your needs.

Frequently Asked Questions: Car Rental Insurance

Still have questions about rental car insurance? Read these frequently asked questions for more.

#1. Can I get last-minute car insurance?

You can obtain car insurance quickly by calling an insurance company or getting an online quote, but if you can give yourself a little more time to shop around, you’ll be able to get better rates than if you buy insurance from the first quote you get.

#2. Is business insurance for car rental firms required?

Typically companies like car rental firms need commercial auto insurance in addition to general liability coverage. This commerical coverage will help meet whatever state requirements are in place as well as cover the fleet of vehicles you’re renting out.

Now that you’ve read through our rental car insurance guide, start comparing car insurance rates today by using your ZIP code in our free tool.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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