The Smart About Money website will be retiring on July 31, 2021. Learn more about this decision.


3: Analyze Your Circumstances

Rental Car Coverage

If you ever have rented a car, you know that “deer in the headlights” reaction when you’re asked if you want insurance to cover the rental. Perhaps you have elected for the insurance just to be safe, or maybe you have denied the coverage believing that you are covered through your own insurance. 

Common rental car coverages include:

  • Loss Damage Waiver – Coverage that waives your financial responsibility in case the car is damaged or stolen. There can be restrictions to the coverage, however.  Comprehensive/collision coverage in your own auto policy probably will cover damage to a rental car.
  • Liability Insurance – Although the rental company must provide the minimum amount of liability, it may not be enough. Your existing policy may provide additional coverage, but an umbrella policy or a nonowner liability policy of your own can provide additional coverage. 
  • Personal Accident Insurance – Covers you and passengers for medical and ambulance bills. Your health insurance or auto insurance already may cover this.
  • Personal Effects Coverage – Coverage for anything that is stolen from the rental. Your homeowners or renters policy may already cover this.

Watch this video from the Insurance Information Institute (III) to learn about rental car insurance. Click here to watch on YouTube.


Source: This video is content of the copyright holder. Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by Smart About Money.

Before renting a car, the Insurance Information Institute suggests:

  1. Call your insurance agent. Check for what coverage you already have and what additional coverage you may need. Also ask if you have (or can get) coverage for administrative fees, loss of use or towing in case of an accident. 
  2. Call the credit card company you will be using to rent the car. Often there will be some coverage provided through the card – be sure to get it in writing (or from the issuer’s website).  
Course Home