At the rental car counter, you'll usually be offered several protection products, each with a daily charge. Some travelers buy everything to be safe; others decline everything assuming they're covered. The right answer depends on your own auto policy, your credit card's benefits, where you're renting, and why. This guide explains each product and how to decide before you get to the counter.
The products you'll be offered
- Collision damage waiver (CDW) or loss damage waiver (LDW): not technically insurance, but a waiver in which the rental company agrees not to hold you responsible for damage to or theft of the rental car, subject to conditions. It often also waives loss of use and administrative fees.
- Supplemental liability insurance (SLI): additional liability coverage, often up to a set limit, above the minimum liability the rental company provides or above your own policy.
- Personal accident insurance (PAI): medical and accidental death benefits for you and passengers.
- Personal effects coverage (PEC): theft of belongings from the rental car.
Does your personal auto policy cover rentals?
For personal rentals in the U.S. and Canada, many personal auto policies extend your existing coverages to a rental car:
- Liability usually carries over to a rental car you're driving for personal use.
- Collision and comprehensive usually carry over only if you have them on your own car, subject to your deductible.
- Rental reimbursement on your policy is for renting a car while yours is being repaired after a covered claim, not for vacation rentals.
Gaps to ask about:
- Loss of use, diminished value and administrative fees that rental companies may charge after damage. Some policies cover them; some don't.
- International rentals. Most U.S. auto policies don't cover rentals outside the U.S. and Canada. Mexico requires liability coverage from a Mexican insurer.
- Business use, long-term rentals, and certain vehicle types such as trucks, exotic cars or large vans may be excluded.
- Drivers not listed on your policy.
Call your insurer or broker before a trip and ask exactly what carries over.
Credit card rental car benefits
Many credit cards offer rental car collision coverage when you pay for the rental with the card and decline the rental company's CDW/LDW. Key points:
- Secondary vs. primary: most card benefits are secondary, paying after your personal auto insurance. Some premium cards offer primary coverage, which avoids a claim on your own policy.
- Collision only: card benefits usually cover damage and theft of the rental car, not liability for injuries or damage to others.
- Exclusions: certain countries, vehicle types, rental lengths and business use may be excluded.
- Claim requirements: you'll need documentation such as the rental agreement, damage report and photos, often within short deadlines.
Read your card's guide to benefits before renting.
Do you need supplemental liability?
If you have adequate liability limits on your own auto policy and a personal umbrella, you may not need SLI for domestic personal rentals. Note that some umbrella policies require underlying auto coverage that applies to rentals. If you don't own a car and have no auto insurance, consider a non-owner auto policy if you rent often, or buy SLI from the rental company. Rental companies typically provide state minimum liability, which may be low; California's minimums are 30/60/15: California DMV – Insurance requirements.
Do you need personal accident and personal effects coverage?
- PAI often duplicates health insurance, auto medical payments or PIP, and life or accidental death coverage you already have.
- PEC often duplicates homeowners or renters coverage for personal property away from home, subject to your deductible.
California rental rules
California regulates certain aspects of rental car damage waivers and how much rental companies may charge renters for damage. The California Civil Code includes provisions (beginning at §1939.01) addressing damage waivers, renter liability and disclosures. Read the rental agreement and the waiver terms carefully, and ask the counter agent to explain any charges you don't understand.
Business travel
- If you rent for business, your personal auto policy may not cover it, especially if you're reimbursed by an employer.
- Employers should consider hired and non-owned auto liability coverage on their commercial policy. See our small business insurance by industry guide.
- Many companies have corporate rental agreements that include coverage.
Peer-to-peer car sharing
Renting a car through a peer-to-peer platform isn't the same as renting from a rental company. Your personal policy may exclude it, and the platform's protection plans vary. Read the terms carefully.
Before you drive away
- Inspect the car and photograph any damage, inside and out, including the odometer and fuel level.
- Make sure existing damage is noted on the rental agreement.
- Know who to call in case of an accident.
- Return the car during business hours if possible and get a receipt.
If you have an accident in a rental car
- Make sure everyone is safe and call police if required.
- Take photos and exchange information.
- Notify the rental company.
- Notify your auto insurer and, if relying on credit card coverage, the card benefit administrator promptly.
- Keep all documents, including repair estimates and loss of use charges.
Rental car checklist
- ☐ Call your insurer: what carries over to rentals?
- ☐ Check your credit card's rental car benefits
- ☐ Confirm liability limits and umbrella coverage
- ☐ Decide on CDW/LDW, SLI, PAI and PEC based on gaps
- ☐ Plan for international rentals separately
- ☐ Photograph the car before you drive away
Contact Alishahi Insurance or call (877) 711-4545 to review your auto coverage before your next trip.
Frequently asked questions
Does my car insurance cover rental cars?
Many personal auto policies extend liability, and collision and comprehensive if you carry them, to personal rentals in the U.S. and Canada. Confirm with your insurer.
Should I buy the collision damage waiver?
It depends on your auto policy and credit card benefits. The waiver may make sense if you lack collision coverage or want to avoid a claim on your own policy.
Does credit card rental coverage include liability?
Usually not. Credit card benefits typically cover damage or theft of the rental car only.
Am I covered when renting a car abroad?
Most U.S. auto policies don't cover rentals outside the U.S. and Canada. Buy local coverage, and note that Mexico requires coverage from a Mexican insurer.
What is loss of use?
A charge the rental company may make for the time a damaged car can't be rented. Not all auto policies cover it.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.