What You Should Know About Car Rental Insurance

Renting a car should be simple but the moment you reach the counter, you’re hit with a series of questions about optional insurance coverage. Do you really need it? Is it worth the extra cost? If you’ve ever stood there unsure of how to respond, you’re not alone. Understanding car rental insurance before your next trip can help you save money, avoid duplicate coverage, and travel with confidence.

Here’s what you need to know before you say yes or no at the rental counter.

What Is Car Rental Insurance and Why Is It Offered?

Rental car companies offer insurance to protect both you and the vehicle while it’s in your care. They do this because most drivers’ personal insurance doesn’t automatically include every kind of protection. Plus, offering insurance is one way they manage their own risk and generate additional income.

The truth is, car rental insurance can be helpful in certain situations, but many drivers may already have some protection through their personal auto policies or credit cards.

Types of Car Rental Insurance You’ll Be Offered

Here’s a breakdown of the typical coverage options available from rental companies:

Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)
This is not technically insurance, but it releases you from financial responsibility if the rental car is damaged or stolen. It may also cover towing and loss-of-use charges.

Liability Coverage
This protects you if you injure someone or damage property while driving the rental. Basic liability is often included, but the limits may be too low to fully protect you.

Personal Accident Insurance
This covers medical expenses for you and your passengers if you’re injured in a crash. It’s a version of what personal injury protection (PIP) or MedPay offers in your own auto policy.

Personal Effects Coverage
If someone breaks into the rental and steals your belongings, this coverage can help replace them.

What You May Already Be Covered For

If you own a car and have insurance on it, you probably already have some coverage that extends to rental vehicles, especially if you’re renting a car in the United States or Canada. Your personal auto policy might include:

• Collision and comprehensive coverage
• Liability coverage
• Medical payments or personal injury protection
  

However, there are some things your own policy may not cover:

• Damage outside the U.S. and Canada
• Administrative or loss-of-use fees
• Coverage gaps if you have liability-only insurance
• Situations where you’re using the car for business purposes
  

That’s why reviewing your policy before your trip is smart. If you’re unsure, Ruffcorn Insurance can help you confirm what you already have.

What About Credit Cards?

Many major credit cards include some level of car rental insurance, usually when you use the card to pay for the rental and decline the rental company’s coverage. In most cases, this coverage is secondary, meaning it only applies after your personal auto insurance has been used.

Some premium cards offer primary coverage, which doesn’t require a claim on your personal policy. However, not all cards provide the same protection. Some exclude SUVs, luxury vehicles, or rentals in certain countries. Always call your card provider or check their benefits guide for details.

When Should You Consider Buying the Rental Company’s Insurance?

In some cases, buying insurance directly from the rental agency is the safer route. Consider adding coverage if:

• You don’t have a personal auto policy
• Your current policy has low limits or high deductibles
• You’re traveling abroad, where your existing coverage doesn’t apply
• You want to avoid filing claims through your personal insurer
• You’re renting a car for a longer period or in a high-traffic area
  

Avoiding Costly Surprises

One common mistake is assuming you’re fully covered, only to find out after an accident that you’re responsible for fees the policy didn’t include. Rental companies may charge for things like:

• Diminished value of the vehicle
• Loss of income while the car is being repaired
• Administrative fees
  

Make sure you ask questions at the counter and understand what is and isn’t included in each option.

Let Ruffcorn Insurance Guide You

At Ruffcorn Insurance, we help our clients travel confidently by understanding their existing coverage and advising on what’s truly needed. We’ll explain how your personal auto policy works with car rental insurance, what credit card coverage may offer, and when additional protection makes sense.

Headed Out of Town? Let’s Review Your Coverage
Before your next rental, connect with Ruffcorn Insurance for a quick review of your car rental insurance options. We’ll help you decide what to decline, what to accept, and how to protect yourself while on the road.