Does Car Insurance Cover Rental Cars?

Airport departures and rental car desks airport signs

You’re standing at the rental car counter with a long line behind you. You got a great rate on a car for the week, and you’re ready to go on vacation with the family. Then, you’re handed a clipboard with an intimidating rental car contract filled with confusing insurance options. Suddenly, you wish you’d spent less time packing and more time researching rental car insurance.

Here’s your chance to be prepared at the rental car counter so you can be on your way faster, and you’ll keep the people in line behind you happy.

I have car insurance. Do I really need to buy their coverage, too?

This is the most common question when it comes to renting a car for domestic travel. The answer is: it depends. You want to make sure you’re covered, but you also don’t want to pay for unnecessary duplicate coverages that could double the price of your rental.

The first step is to check your auto insurance policy, or contact GEICO to see what your coverage is. If you carry comprehensive and liability coverage on your personal car, coverage will extend to your rental car. Usually, if you’re renting a car of similar value to your personal car, in all likelihood the insurance coverages will be adequate for the rental.

You should also check with the credit card company — the credit card that you’ll be using for your car rental. If there are any gaps in coverage with your personal auto policy, the credit card company may provide secondary coverage.

Rental Car Coverage Defined

Know before you go. The rental company will offer four main options that in many cases you probably don’t need. Just find out if the coverages below are duplicate coverages you already have.

Collision Damage Waiver (CDW)/Loss Damage Waiver –  This is not an insurance product, but rather a waiver that transfers financial responsibility from you to the rental car company in case of damage or theft. In most cases, waivers also provide coverage for “loss of use” if the rental car company charges for the time a damaged car can not be used because it is being repaired.

As previously mentioned, check with your auto insurer and credit card company to make sure you’re already adequately covered, and you may be able to decline this coverage.

Liability Insurance – If you have adequate liability coverage on your own vehicle, this is one coverage you can always decline on your rental.

Personal Effects Coverage – If you have a homeowners, renters or condo policy, your personal items will generally be covered even if they are stolen from a rental car. Review your policy documents to be sure, then decline this coverage.

Personal Accident Insurance – This will cover your medical bills in the event of a crash in the rental car. As long as you have personal injury protection on your auto policy or adequate health insurance, you can decline this coverage.

Have more questions about what insurance covers? Check out our Insurance 101 section for more informative articles.

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  1. Margaret says

    Thanks to everyone who posted questions & answers. Really made my decision about additional coverage on my rental car very easy.

  2. Bob Cornacchioli says

    One more question about car rental insurance.. does Geico or any other insurance coverage – pay the rental agency for lost revenue if the car was damaged and couldn’t be rented until repaired? Is there a limit to the # of days Geico would pay the rental company?

  3. James G Corum says

    This article seems to be misleading. I called GEICO to see if my liability coverage would cover a rental car in New Zealand, and the customer service representative said no.

    But you say here in this article: “Liability Insurance – If you have adequate liability coverage on your own vehicle, this is one coverage you can always decline on your rental.”
    Which seems to be a yes.

    Which is it?

    • Jennifer says

      Your personal auto policy covers you within the US, Canada and Mexico –it does NOT cover you anywhere outside of these territories. I tell my clients to always ask what the rental co’s coverage costs per day and if any coverage is offered beyond the collision, comp and liability that your personal auto policy extends. your personal auto policy does not offer coverage for LOSS OF USE which the rental co is going to charge you for the amount of days the car cannot be used because tis in the shop. Bottom line, if you are renting for a week or more, I would suggest taking the rental co’s insurance if its reasonable. It fills in the gaps where your own policy leaves off.

  4. Donna Watkins says

    i will say that Geico reps have friendly customer service but you people and your comments below are getting this all wrong. IFyou have rental coverage on your Geico policy that transfers to a rental vehicle , that’s fine and dandy . Geico will pay the physical damage to the rental car if it gets damage ,but what Geico doesn’t tell you is that they will not cover the other charges the rental company has in their contracts for you. Ie.. loss of use, diminished value, admin fees, appraisal fees etc.. The tell you ohh we covered the whole thing for you, then here comes the bill for the balance from the rental agency. You call Geico to ask why did you tell me you paid this and it was settled yet i am still getting a bill? That’s when they break it to you that they only cover the Estimate only. when i first sent them the bill they told me, yes, you have rental on your policy but the rental company wont provide fleet logs, so we cant pay their loss of use. .. that’s stupid for a rental company to provide logs. duhh its a rental agency, they have a million other cars in their fleet, but the rental company did lose the right to use this car because i accidently damaged it. You (Geico) being my Carrier, said you would cover all the loss. But now that im getting a bill, you tell me to file with my credit card benefits. You leave it up to my credit card to cover this. that’s wrong. so ppl if geico tells you they will your entire loss from the rental agency, just know they will only cover part of it. this applies to almost all policy’s that have rentals. myself and 3 other ppl i know have had this happen with geico. Guess what, we dropped and changed companies. My other insurance company has no problem being upfront about what they will and will not pay. They don’t leave it to their insured’s to pay out of pocket. . Gieco DID NOT AND WOULD NOT PAY LOSS OF USE, Even Though i had rental reimbursement on my policy.

    • Ange says

      Thank you for identifying the additional charges the rental company inflicts if damage to vehicle.
      I just called Geico and as you said, rep said yes covered. Then I asked about additional charges, no, they do not cover.
      When I asked about having to go thru credit card first, she wanted to transfer me to claims dept.
      I have decided to get additional coverage from rental company.
      Although it will be an additional expense, if anything happens to the car, I can take key to rental company and say goodbye.

  5. Alma J. Johnson says

    I enjoy the reminders about what to do in certain situations. I’m a very careful driver because I witness such strange driving from others. Thanks for addressing these issues that may occur. Thanks for taking the time to think about us as customers!!!!!!`