Do You Have to Purchase Insurance When Renting a Car?

Aug 16, 2023 2 min read

Exploring a new destination is exciting, but nothing can derail the fun of an open road adventure quite like a car accident — especially when you’re in a rental car. 

As with your own car, you want to make sure you have adequate insurance coverage for damage to the rental car, the property of others and for personal injury lawsuits. But with the average rental car insurance policy costing $61 per day, it’s easy to wonder if you should get rental car insurance. Consider these tips before you sign any contracts at the rental car counter.

Do I Need Rental Car Insurance?

If you own and insure your own car, your personal policy likely protects you against big losses you might incur. When it comes to renting, there are a few areas to consider. In general, the insurance options offered by a rental company overlap with auto insurance policies you already have. Plus, if you rent a vehicle using a credit card, you likely get free physical damage coverage — but not liability coverage — as a perk from your credit card company. However, each insurance policy is unique, and you should always check with your Farm Bureau agent prior to renting a car. When renting a car, there are three main risks to insure against:

  1. Damage to the Car

If you have full coverage, that means you have comprehensive and collision insurance that covers damage to your automobile for covered incidents while you’re driving, such as hitting a pole, or when you’re not driving, think storm damage or theft. You should check with your agent to determine if your auto coverage covers rental cars. In the event of an accident involving a rental vehicle, you would most likely still be required to pay your insurance policy’s deductible

  1. Injuries to Others or Damage to Other People’s Property

States require all drivers to have automobile liability insurance to cover injuries to another driver and damage to others’ property if you’re involved in an at-fault accident. You may want to discuss with your agent, to ensure that you have adequate liability limits to properly protect yourself. The liability coverage offered by your personal auto policy typically extends coverage you when you rent a car, but most personal auto insurance policies won’t cover car rentals outside the U.S. Additionally, personal car insurance policies are unlikely to provide coverage for any rental car for more than a month.

  1. The Rental Car Company’s Lost Income Due to Damage

Even if the damage to a rental car is covered by your insurance, turning down rental protection offered through the rental agency may make you liable for lost income to the rental company if a car you’re driving is taken out of commission for repair. Your personal auto insurance policy and your credit card company’s insurance perks may not cover “loss-of-use” charges.  It should be noted that this practice is outlawed in some states. Be sure to read the fine print before assuming you need to purchase loss-of-use protection from the car rental company.

When In Doubt, Ask an Agent

The world of insurance can be hard to navigate on your own. Your Farm Bureau Financial Services agent can help ensure you’re protected no matter where you go.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.