Should I Buy Rental Car Insurance? (Yes—You’ll Be Glad You Did)

You’ve just survived the airport gauntlet — security lines, delayed flights, cramped seats, and that guy who reclined his seat directly into your kneecaps. You’ve dragged your luggage to the rental counter, and now you’re facing that inevitable question:

“Would you like to buy rental car insurance today?“

The rental agent waits, pen hovering. Your brain frantically searches for the right answer while the line builds behind you.

Here’s our professional insurance advice: Say yes. Buy rental car insurance. Every time.

I know, I know — it feels like you’re being upsold on something you don’t need. Like when the electronics store tries to sell you the $89 warranty on a $100 toaster. But unlike that questionable toaster protection plan, the decision to buy rental car insurance is one “extra” that’s absolutely worth it.

Why “Should I Buy Rental Car Insurance” Even a Question?

You’re probably thinking, “But doesn’t my regular auto insurance cover rental cars?” Or, “My platinum rewards credit card has rental coverage, right?”

Well, yes… but also no. And that “no” part can get expensive. Really expensive.

Your auto insurance policy might extend coverage to your rental. Your credit card might offer some protection. But both come with enough caveats, exclusions, and fine print to make a lawyer’s head spin. And when you’re standing in a body shop staring at $3,000 worth of damage to a car you drove for three days, “might” isn’t a very comforting word.

The Three Big Gaps in Relying on Your Own Insurance

Before you decline that rental coverage, let’s talk about three major ways your personal auto policy might leave you hanging like a bad date.

1. Liability Coverage May Not Transfer (Or Might Be Insufficient)

Most personal auto policies do extend your liability coverage to rental cars — but not all of them. And even when they do, there are conditions:

• Only for “temporary substitute” vehicles in many cases
• Not if you’re out of the country
• Often with reduced limits (some nonstandard auto insurance has restrictions)

Remember, if you’re renting in an unfamiliar place, local minimum liability requirements might be higher than your policy covers. Normally, your personal auto will adjust to match? (Pro Tip: Ask your agent before you rent.)

2. Physical Damage Coverage Is Spotty at Best

Here’s where things get tricky. Your collision and comprehensive coverage may extend to a rental car, but only if:

• You have those coverages on your personal auto policy (not everyone does)
• The rental isn’t for business purposes (possibly an exclusion)
• You’re not renting a vehicle type substantially different from what you own (possible exclusion)
• You’re not in a country excluded by your policy (Traveling to Mexico? You need Mexico auto Insurance.)

That sports car upgrade seemed like a good idea until you realize your policy doesn’t extend physical damage to certain rentals. Now, that fender bender in your rented Mustang convertible? Well, your insurer just left the chat.

3. The Dreaded “Other Charges” No One Covers

Even if your personal auto insurance covers physical damage. It still only pays for the actual repairs; it almost certainly won’t cover:

• Loss of use charges — What the rental company charges for income lost while the vehicle is being repaired
• Diminution of value — The reduction in the vehicle’s resale value after an accident, even after repairs
• Administrative fees — Because nothing says “insult to injury” like paying someone to process your accident paperwork

These fees aren’t trivial, either. Loss of use alone can run $25-75 per day for weeks. Your insurer will argue these fees aren’t covered because they’re not “direct physical damage” — and they’ll be contractually correct.

Let’s Talk About Your Credit Card Coverage

“But wait!” you say, “My credit card offers rental car protection!”

Ah yes, the credit card coverage. It sounds great in those marketing materials, doesn’t it? But here’s what they don’t emphasize:

• It’s usually secondary coverage, meaning it only kicks in after your auto insurance policy pays (or refuses to pay)
• You must decline the rental company’s coverage to activate it
• Many cards exclude certain vehicle types—luxury cars, large SUVs, vans, and trucks are often on this list
• There are typically strict time limits—rent for too long and poof, no coverage
• International rentals are often excluded or have additional restrictions

One client learned this the hard way in Iceland when his card’s coverage didn’t apply to “off-road vehicles” — which, according to the fine print, included the standard 4WD SUV he rented to navigate perfectly normal Icelandic roads.

Peace of Mind Is Worth $10–$20/Day

Let’s be frank: rental car coverage isn’t cheap. At $15-30 per day, it can add up to more than the base rental cost sometimes.

But you know what else isn’t cheap?

• The $2,500 deductible on your personal policy
• The hours spent on the phone arguing with your insurer and the rental company
• The stress of unexpected bills arriving months after your trip
• The potential hit to your insurance premiums if you have to file a claim

When that rental agent offers you coverage for $18 a day, try reframing it: You’re not buying insurance — you’re buying peace of mind. You’re buying the right to walk away from virtually any scenario without opening your wallet again.

That fender bender in the hotel parking lot? Hand over the keys and walk away. Coffee spilled all over the interior? Keys, counter, goodbye. Rock chip in the windshield? Not your problem.

Suddenly, $18 a day sounds like a bargain compared to the alternative: “That’ll be $800 for the windshield, $150 for loss of use, and $75 for our administrative fee. How would you like to pay?”

Quick Answers to Common Questions

Does my personal auto policy cover rental cars? Maybe, with limitations and exclusions. Read your policy or call your agent before assuming.

What if I rent a car while traveling internationally? Most personal auto policies provide zero coverage outside the U.S. and Canada. Your credit card might help, but coverage is often limited. The rental company’s coverage is usually your safest bet.

Is the rental company’s insurance overpriced? Yes, compared to regular auto insurance. No, compared to the potential hassle and out-of-pocket costs of handling a claim yourself.

If I have “full coverage” on my car, am I good to go? “Full coverage” isn’t a technical term and means different things to different people. Even the most comprehensive personal auto policy will likely have gaps when it comes to rental cars.

Our Advice? Just Buy Rental Car Insurance

Here’s our official insurance agent advice, gained from years of watching clients navigate rental car claims: Just buy rental car insurance.

Even if your personal auto policy might cover it. Even if your credit card offers protection. Even if it seems expensive.

Buy it, get the piece of paper saying you’re covered, and enjoy your trip knowing that if anything happens — from a major accident to a door ding — you can return the keys and walk away.

As one of our agents puts it: “I’ve never had a client regret buying rental coverage, but I’ve had a few regret declining it.”

Bottom Line: Don’t Ruin Your Trip Over $15 a Day

The next time you’re at that rental counter and the agent asks if you want their coverage, remember this: You’re not just buying insurance — you’re buying simplicity. You’re buying the right to enjoy your trip without worrying about what happens if the car gets damaged.

Is that worth an extra $15-30 per day? We think so. Your future self, the one who doesn’t have to deal with claims adjusters and surprise bills, will thank you.

Have questions about your specific policy and how it might apply to rental cars? Give us a call before your next trip. We’re happy to review your auto insurance coverage and help you make an informed decision — even if that decision is to buy the rental company’s coverage anyway.

Disclaimer: This article provides general information only. Coverage varies by policy, company, and situation. Always review your specific policy documents or speak with your agent to understand your coverage.