Do I Need Car Rental Insurance?

By: Donna Craven, CPL

Donna is a licensed insurance broker who has worked in the industry for more than 28 years.

rental car and keyGetting out the door for your family vacation is never easy. Along with packing and tying up loose ends at work, you probably have some major logistics to think about: hotel, flight, rental car, etc.

At the last minute, people often ask us: do I need car rental insurance? The short answer is “probably not,” but there are a few factors that come into play… Here’s what you need to ask yourself before you get to the car rental kiosk at the airport:

Do you have collision AND comprehensive coverage on your personal MA car insurance policy?

Are you the named insured individual on your auto policy (as opposed to one of the drivers listed on someone else’s policy)?

Are you renting a car for vacation (and not for business)?

Are you renting a car in the U.S. or Canada?

If you answered “yes” to all of the above, then your existing auto coverage will follow you into your rental car. Most likely you don’t need to shell out for additional rental car insurance through the rental company—which is good news, because the daily rates are pretty pricey.

Still, you should keep these points in mind:

  • If you do get into an accident wherein you are at fault, any accident forgiveness benefits you have right now may be discontinued, just as if you’d gotten into the accident in your own car. Your insurance rate may also go up.
  • If something goes wrong, your deductible will probably still apply. So you may still have to pay some out-of-pocket costs before your insurance takes care of rental car damages.
  • “Loss of Use” costs are NOT covered by your insurance. Loss of use refers to the lost rental income that the rental car company wants to reclaim after an accident, while their car is tied up in the shop. You can check with your credit card company to see if they’ll provide this coverage for you.
  • Your auto insurance policy is designed to provide “Actual Cash Value” coverage, in the event that you total a rental vehicle. Since most rental cars are relatively new, the rental car company will be looking to recoup the value of a new car, but your insurance will probably only pay out for the depreciated value. Here again, your credit card company may offer a solution to bridge this gap.

If you answered “no” to any of the above questions (e.g. you are only insured through your spouse’s car insurance policy; you don’t own a car and therefore have no personal auto insurance; you are renting a car mainly for business purposes; or you aren’t sure if you carry both comprehensive AND collision coverage) make a point to contact your insurance agent before renting. He or she can tell you if/how much supplemental coverage makes sense for you. It’s very important to discuss the issue with a professional insurance agent versus the rental car company employee, who a.) isn’t licensed in personal insurance, and b.) isn’t necessarily looking out for your best interests.

Finally, if you are renting a car for a vacation outside the U.S. (not including Canada), your personal auto insurance policy probably will not apply. A personal umbrella insurance policy, however, will protect you anywhere in the world. Ask your agent about rental car insurance outside the U.S., and whether it makes sense to explore an umbrella policy for international driving (and countless other risks at home).

Got more questions about car rental insurance? Ask away! Email us at, or call any time: 508.339.2951.