Rental car insurance: What to know and how it works
Rental car insurance is different from personal car insurance. Unlike your personal policy, which covers you for an extended period of time, rental car insurance is temporary, only covering you and the vehicle for the specific days you pay for.
Rental companies offer rental car coverage options directly to consumers. You’ll typically be asked if you want to add this coverage while at the checkout counter when picking up your vehicle.
Rental car insurance comes in several forms, including:
Personal accident insurance: This coverage pays for the medical and ambulance bills for any injuries you or your passengers suffer during an accident while in the rental vehicle.
Liability coverage: If you’re in a wreck in the rental car, liability coverage extends to the medical bills, car repairs, and property damage of other people, like drivers and pedestrians.
Loss/collision damage waiver: Though not technically insurance, this waives your financial responsibility if the car your rent is damaged or stolen.
Personal effects coverage: This covers your belongings if they’re stolen from your rental vehicle. A renters or home insurance policy will sometimes cover personal belongings separately, and you also may be able to purchase a rider to cover them.
Learn More: What Does a Renters Insurance Policy Cover?
What rental car insurance covers
Rental car insurance can cover damage to the vehicle you’re driving, medical bills if you or a passenger is hurt, and the cost of replacing your computer, camera, or suitcase if they’re stolen out of your vehicle. Rental car insurance also covers a totaled vehicle, up to a certain point.
With the purchase of a loss damage waiver, rental car coverage can keep you from paying a loss of use fee, which can be charged if your rental vehicle needs repairs or is removed from the rental company’s fleet. If the policy includes liability coverage, it extends to the other cars and people involved in an accident.
What won’t rental car insurance coverage cover? The insurance could become void if you break any laws — like speeding or driving while intoxicated — so make sure you follow the rules of the road.
Cost of rental car insurance
The exact cost of rental car insurance varies by provider, vehicle, location, coverage type, and other details. The District of Columbia Department of Insurance, Securities & Banking (DISB) provides a good estimate of what Washington, D.C., residents — and Americans, more generally — can expect to pay per coverage type:
Personal accident: $1 to $5 per rental day
Liability: $7 to $14 per rental day
Loss damage waiver: $10 to $20 per rental day
Personal effects: $2 to $5
With these numbers, you’d pay somewhere between $140 and $308 for full-coverage insurance on a weeklong car rental.
Learn More: Rental Car Insurance: Do You Need It?