Rental Car Insurance – Should I buy rental car insurance?

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

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UPDATED: Mar 13, 2020

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Renting a car seems easy enough. Simply choose your car, how long you need it for and compare rental car quotes online however finding the best car rental prices can often be much more confusing.

Why? All the additional options.

From GPS to car seats to rental car insurance your $19 dollar a day rental car can often be $50 or more before you even get the keys.

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Rental car insurance is a form of car insurance sold by car insurance companies to drivers renting a car. No matter who you rent a car from the odds are you will asked to purchase rental car insurance since this represents one of the largest income streams for car insurance companies nationwide. In fact, it’s so profitable that some car insurance companies even pay bonuses to employees based on how much insurance they sell and not how many cars they rent.

Companies like Alamo, Thrifty, Avis, Budget, Enterprise and every other rental car agency offer some form of rental car insurance ranging from under $10 to $50 a day! However the fact is most drivers do not need rental car insurance.

What is rental car insurance?

Rental car insurance is usually sold in 2 different policy types, each costing a separate daily premium. The two most common forms of rental car insurance are:

  • Loss Damage Waiver (LDW) – This auto insurance provides coverage from liability if the rental vehicle is damaged from almost any event.
  • Supplemental Liability Insurance (SLI) – is insurance protection from lawsuits brought on by injured parties resulting from an accident involving your rental car.

While both of these insurance policies certainly sound great to have its important to understand how you may already be covered under your existing car insurance policy or through others forms of insurance available.

Are you already covered for a rental car?

If you are renting a vehicle on company business its best to check with your company’s travel department and inquire about whether or not you need to purchase rental car insurance. Many companies have umbrella auto insurance coverage which extends to all employees renting a vehicle for work related activities.

For personal use of a rental car then you need to check with your car insurance company and inquire about how your existing car insurance policy extends to rental cars. Many car insurance policies extend coverage to rental cars but since laws vary depending on where you live its important to disclose to your car insurance company where you will be renting the car and find out how much you are covered for.

If your car insurance company does not provide coverage then its also a good idea to call your credit card company. Many credit card companies have rental car insurance as part of cardholder benefits, if you purchase the car rental using their card. However its important to understand the details of your coverage well ahead of standing in line at the car rental counter. Sometimes credit card companies only provider minimum levels of insurance so purchasing the additional coverage may be worthwhile.

What if I do not have insurance – Where should I buy rental car insurance?

Car insurance is mandatory by law so you will need to show proof of insurance or purchase insurance before renting a car. Adding car insurance at the last minute is always the most expensive way so it’s best to know how much coverage you have before comparing quotes. Purchasing rental car insurance online is often much less expensive than adding coverage when you go to pick up your car.

Some drivers also may want to check in to the option of purchasing a non-owners car insurance policy, especially though who frequently rent cars. A non-owners car insurance policy is often very affordable and extends coverage to any vehicle you drive which you do not own. The annual cost of a non-owners car insurance policy is very affordable and sometimes even runs only a couple hundred dollars a year with sufficient policy coverage.

Learn more about rental car insurance and compare car insurance quotes from auto insurance providers nationwide by simply entering your ZIP code above.

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