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Rental Car Insurance: Are You Covered?

If you're renting a car this summer, reviewing the various insurance options ahead of time can help you keep costs down. Here are some key questions to ask before you arrive at the rental counter, plus tips for getting the most bang for your car-rental buck.

Are you already covered through your personal insurance?
In most cases, your personal policy will extend to a rental car. Be sure to call your carrier to confirm what your policy covers (e.g., damage, theft, liability).

Is insurance coverage through your credit card an option?
You may also get some form of rental car coverage through your credit card. American Express, Discover, MasterCard, and Visa provide rental insurance options to members for free. If you decide to use your card for rental car insurance, keep these pointers in mind:

  • Charge it. You'll need to charge the whole rental fee to your credit card and decline any extra coverage the car rental company offers.
  • Choose the right vehicle. Trucks, off-road vehicles, and expensive, exotic, or antique cars generally aren't covered.
  • Be aware of time limits and other restrictions. Find out if there's a cap on how long your credit card covers your rental car. Coverage may not be available in some countries, so check the company's policy if you're traveling abroad.

What kind of coverage does the rental company offer?
Another option is purchasing coverage through the car rental company. There are usually four main choices:

  • A damage waiver transfers financial responsibility from you to the car rental company in case of damage or theft.
  • Supplemental liability insurance protects you against claims that exceed your regular policy limits.
  • Personal effects coverage protects personal property that's damaged or stolen from a rental car. (Your existing homeowners insurance policy may also cover these items.)
  • Personal accident insurance covers any injuries that you or your passengers sustain. (Personal injury protection on your regular auto policy will also cover the rental.)

Finding a balance between the cost of coverage and what you get for that price point is key to evaluating your options.

Helpful tips to keep costs down
Here are some additional ways to save when renting a car:

  • Don't always go for name brands. National car rental chains typically charge 15 to 30 percent more than independent agencies.
  • Track rates. Using vendors like Autoslash.com, you can make reservations with some of the major companies and the site will automatically check for better rates, rebooking you if a lower price becomes available.
  • Look for discounts. You may be able to find money-saving coupon codes online. Car rental companies also offer discounts to members of frequent flier programs and other organizations, such as AAA and Costco.
  • Avoid the airport. Prices at car rental locations near an airport can be 30 percent higher due to extra fees.
  • Plan your trip around lower rates. Weekend prices are sometimes lower than business-day rates.
  • Prepay. Many car rental companies offer a discount if you're willing to prepay for your car.

A smooth start to your vacation
Don't wait until you're at the rental counter to start considering your insurance options. A little preliminary research will help ensure a smooth start to your trip—and possibly free up some funds in your vacation budget. Safe travels!


2014 Commonwealth Financial Network®