Do I Need Rental Car Insurance?

So often, we plan every detail of a trip, only to let rental car insurance become a game-time decision at the counter. Don’t hold up the line as you stand there wondering, “Can I rent a car without insurance?” Instead, a little advanced planning can help you answer the ultimate question: Is rental car insurance worth it?

It’s important to make sure you’re protected, of course, but the rental agency isn’t your only option. Learn whether your personal auto insurance policy gives you enough coverage, if you can count on the credit card you used to make the reservation, or if it might be a good idea to purchase that rental car insurance after all. And, if you decide you need to beef up your coverage, consider using our Credit Union Locator Tool to discuss your credit union car insurance options.   

Two men sitting down discussing rental car insurance policy

What Is Rental Car Insurance?

Rental car insurance protects you from paying for damage or losses if you have an incident while you’re renting a vehicle. It can cover: 

Rental car insurance isn’t the same as rental car reimbursement insurance, a benefit you can get with your standard car insurance policy. Reimbursement insurance helps cover the cost of renting a car so you can get where you need to go while your ride is repaired. 

Depending on the coverage, rental car insurance typically costs anywhere from $20 to $60 per day. So, it won’t break the bank, but it probably cancels out that great rental discount you found online. And on longer trips, it can really add up — enough that you may wonder, can I rent a car without insurance?

In a word, yes. The law doesn’t require you to get insurance for your rental car, even if you don’t have an auto insurance policy for everyday life. Rental car companies carry minimal coverage for their vehicles — just enough to make them legal to drive. That basic insurance, however, protects them, not you. 

Why do you need car insurance at all?

It’s worth taking a moment to explore why you need some form of car insurance, whether or not you supplement it with rental car insurance. Nearly all states require drivers to have auto insurance. But, even those that don’t still require drivers to have proof of financial responsibility should they cause an accident and need to pay damages.

The bottom line: If something happens while you’re renting a vehicle, you may be responsible for a whole lot of bills. So while the answer to the question, “Do I need rental car insurance?” is legal, “No,” it’s smart to explore your options, whether or not you buy what the guy at the rental counter is selling. 

What Does Rental Car Insurance Cover?

Coverage terms will differ depending on the policy and the state in which you’re renting, but rental car insurance options usually include:

When Do I Need Rental Car Insurance?

Even though renting a car without insurance is legal, you shouldn’t leave yourself totally exposed. And in some cases — like if you’re traveling overseas — even the most expensive everyday insurance won’t protect you. Policies issued in the United States usually cover you in the 50 states and Canada. Still, they typically don’t apply in Mexico and beyond, so if you’re leaving the country, plan on getting insurance. 

If you only pay for liability on your personal vehicle, check out rental policies that cover medical expenses for you and your passengers. Icy mountain roads, crowded tourist traps, and unfamiliar traffic patterns could put you at higher risk for mistakes behind the wheel. And remember that traditional health insurance plans may not cover all medical bills from accidents you cause.

Want to rent that sweet convertible you’ve always coveted? Consider getting the loss damage waiver or beefing up your personal policy. If you rent a luxury vehicle but don’t drive one regularly, your everyday insurance might not fully cover damage to a high-end ride. And if an accident would make your premiums unaffordable, buying separate rental coverage could save you money in the long run. 

Coverage You May Already Have

Before you get talked into a policy at the counter, explore the protections you may already have:  

Further Resources on Rental Car Insurance

Looking for more information about the overall car rental process? Check out these resources: 

Protect Your Wallet, Not Their Bottom Line

Once you’ve explored your plans and existing coverage, you may decide that rental car insurance is unnecessary or, conversely, a valuable addition to your trip. For additional support, our Credit Union Locator Tool can help you find an unbiased expert at your local credit union.  

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Did you know?

Many credit unions offer access to discounted car insurance as a benefit of membership, along with lower fees and a number of other advantages. While banks answer to their shareholders, credit unions are owned by their members, so they’re driven to serve their customers rather than the bottom line. 

Find the right Credit Union for you

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