You have several options for getting car rental insurance, and the best choice depends on your existing coverage. The simplest way is often to use your own personal auto insurance policy if it includes coverage for rental cars. Alternatively, many major credit cards provide primary or secondary rental car insurance as a cardholder benefit when you use that card to pay for the rental and decline the rental company's expensive coverage. If you lack these, you can purchase a standalone non-owner auto policy or buy the coverage directly from the rental company, though this is typically the most expensive route.
Understanding Your Existing Coverage
Before you rent a car, the most critical step is to call your auto insurance agent. Ask them specifically if your policy's liability, comprehensive, and collision coverages extend to a rental car. Most standard policies do, but confirm any limitations, such as the type of vehicle or rental duration. Also, contact your credit card company to understand the details of their rental insurance benefit. Primary coverage from a card like the Chase Sapphire Reserve means it pays out before your personal insurance, saving you from a potential premium increase. Secondary coverage kicks in after your personal auto insurance.
Rental Company Coverage Options
When you arrive at the counter, the agent will typically offer several products. The most common is a Loss Damage Waiver (LDW), which isn't technically insurance but a waiver that releases you from financial responsibility if the rental car is damaged or stolen. Other offerings may include Liability Insurance Supplement, Personal Accident Insurance (PAI), and Personal Effects Coverage (PEC). These can be costly, adding $20 to $50 or more per day to your rental bill.
Making the Right Choice
Your decision should be based on a quick risk assessment. If you have robust personal auto insurance and a credit card with primary coverage, you can confidently decline the rental company's offer. If you don't own a car and therefore don't have auto insurance, your best bet is to rely on a credit card with strong benefits or consider a standalone non-owner policy for frequent renters.
| Insurance Option | Typical Cost | Key Providers | Coverage Type | Best For |
|---|
| Personal Auto Policy | Included in premium | State Farm, Geico, Allstate | Liability, Collision, Comprehensive | Car owners with full coverage |
| Credit Card Benefit | Free (with card) | Chase Sapphire, American Express | Primary/Secondary Damage Waiver | Frequent travelers who use eligible cards |
| Rental Company (LDW) | $25-$50/day | Hertz, Enterprise, Avis | Damage/Loss Waiver | Those without personal insurance/card benefits |
| Standalone Policy | $150-$400/year | Liberty Mutual, GEICO (Non-Owner) | Liability, sometimes Collision | People who frequently rent but don't own a car |
| Premium Credit Cards | Annual Fee ($95-$550) | Various | Varies by card | High-spenders seeking maximum protection |
