Rental Car Insurance: Do You Need It? Credit Cards and Your Policy
Many US drivers do not need to buy all of the rental car company’s insurance. If you have a personal auto policy with liability, collision and comprehensive coverage, it usually extends to a rental car you drive in the US for personal use. Many travel credit cards also cover rental car damage or theft when you pay with the card and decline the counter’s collision damage waiver (CDW). The Chase Sapphire Preferred, for example, offers primary coverage up to $60,000 and the Sapphire Reserve up to $75,000. You may still want rental coverage if you have no car insurance, only liability, are renting abroad, renting for business, or want to avoid a claim on your own policy.
Do You Need Rental Car Insurance? Quick Answer
| Your Situation | Do You Need the Counter Coverage? |
|---|---|
| Full personal auto coverage + card with primary rental coverage | Usually no. Decline CDW; your policy covers liability |
| Full personal auto coverage, no card benefit | Often no, but you pay your deductible and a claim could raise rates |
| Liability-only auto policy | Consider CDW/LDW or a card with rental damage coverage |
| No car insurance at all | Yes: buy liability (SLI) and damage coverage, or a non-owner policy |
| Renting outside the US or Canada | Often yes; check card coverage and local laws (some countries require local coverage) |
| Business rental | Check your employer’s policy; personal policies may exclude business use |
| Renting a truck, van, exotic or luxury car | Check exclusions; card coverage often excludes these |
Types of Rental Car Insurance Explained
Collision Damage Waiver (CDW) / Loss Damage Waiver (LDW)
Technically not insurance, a CDW or LDW is an agreement that the rental company will not charge you for damage to or theft of the car. It often costs a significant daily fee at the counter, and it may also waive “loss of use” and administrative fees that some personal policies do not cover.
Supplemental Liability Insurance (SLI)
SLI increases liability protection for injuries to others and damage to their property beyond the state minimum the rental company provides. If you have good liability limits on your own policy, you may not need it. If you have no auto insurance, it is important.
Personal Accident Insurance (PAI)
PAI covers medical costs and accidental death benefits for you and your passengers. Health insurance, personal injury protection (PIP) or medical payments coverage on your auto policy often provide overlapping coverage.
Personal Effects Coverage (PEC)
PEC covers belongings stolen from the rental car. Homeowners or renters insurance often covers personal property away from home, subject to your deductible.
Does Your Personal Car Insurance Cover Rental Cars?
In most cases, a personal auto policy extends to a rental car used for personal reasons in the US, and often in Canada, with the same coverage types and limits you carry on your own car. That means:
- Liability usually transfers to the rental car.
- Collision and comprehensive transfer only if you carry them on your own vehicle, and your deductible still applies.
- Loss of use, diminished value and administrative fees charged by the rental company may not be covered by some insurers.
- Rental reimbursement coverage on your policy is different: it pays for a rental while your own car is being repaired after a covered claim.
- International rentals are often not covered, except sometimes in Canada.
Call your insurer or check your policy before your trip. If you are thinking of changing insurers, our guide on how to switch car insurance explains how to avoid a coverage gap.
Credit Card Rental Car Insurance
Many credit cards include an auto rental collision damage waiver. It generally covers damage to or theft of the rental car, but not liability, injuries or personal belongings. The key difference is whether it is primary or secondary:
- Primary coverage pays first, so you do not need to file a claim with your own insurer, which helps avoid a deductible and a potential rate increase.
- Secondary coverage pays only what your personal policy does not, such as your deductible. If you have no personal auto insurance, secondary coverage may act as primary on some cards.
Chase Sapphire Rental Car Coverage
| Feature | Chase Sapphire Preferred | Chase Sapphire Reserve |
|---|---|---|
| Type of coverage | Primary | Primary |
| Maximum coverage | Up to $60,000 (actual cash value) | Up to $75,000 |
| Rental length | Up to 31 consecutive days | Up to 31 consecutive days |
| Covers | Collision damage, theft, and valid loss-of-use and towing charges | Collision damage, theft, and valid loss-of-use, administrative and towing charges |
| Does not cover | Liability, injuries, personal belongings | Liability, injuries, personal belongings |
Based on Chase benefit guides and major card review sites as of 2026. Benefits change, so always read the current Guide to Benefits for your card.
How to Use Credit Card Coverage
- Pay for the entire rental with the eligible card (points from that card usually count).
- Decline the rental company’s CDW/LDW. Accepting it can void the card coverage.
- List all drivers on the rental agreement; coverage generally applies to authorized drivers only.
- Inspect the car and take photos or video of any existing damage before driving away.
- If there is damage or theft, get a police report if applicable, keep all paperwork, and notify the card’s benefits administrator promptly. Chase, for example, requires notice within 100 days and a completed claim form within 120 days.
Common Credit Card Exclusions
- Expensive, exotic and antique vehicles (for example, certain luxury and high-performance brands)
- Cargo vans, trucks other than pickups, limousines, motorcycles, mopeds and RVs
- Rentals longer than 31 days, leases and mini-leases
- Hourly car-sharing services in many cases
- Some countries (policies vary by card)
- Liability for injuries or damage to other people’s property
How Much Does Rental Car Insurance Cost?
Rental company coverage is priced per day and varies by company, location and vehicle. The collision/loss damage waiver is usually the most expensive product, and adding every option can nearly double the base rental rate on a cheap rental. Standalone rental car damage policies sold by travel insurers and third-party companies often cost less per day, but usually require you to pay the rental company first and seek reimbursement afterward.
When You Should Buy Rental Car Insurance
- You have no personal auto insurance (consider SLI plus CDW/LDW, or a non-owner policy if you rent often)
- Your policy carries liability only and you do not have a card with rental damage coverage
- You are renting abroad and neither your policy nor your card covers that country
- You are renting a vehicle your card excludes
- You want to avoid any claim on your personal policy and have no primary card coverage
- You are traveling for business and your employer does not provide coverage
- You simply want the convenience of walking away from minor damage without paperwork
If you do not own a car, see our guides on getting car insurance without a license and insuring a car not in your name for related coverage options.
What to Do If You Damage a Rental Car
- Make sure everyone is safe and call 911 if anyone is injured.
- Call the police and get a report number if required.
- Photograph the damage, the scene and the other vehicle.
- Exchange information with any other driver.
- Notify the rental company right away.
- Contact your insurer and/or card benefits administrator.
- Keep copies of the rental agreement, damage report, repair estimate and final invoice.
Our guide on what to do after a car accident covers these steps in more detail.
Not insurance advice: Coverage depends on your specific policy, card agreement, state and rental location, and benefits change over time. Confirm coverage with your insurer and card issuer before you travel. Rental car companies and card issuers set their own terms.
Related guides: How to switch car insurance · What to do after a car accident · Insure a car not in your name
Rental Car Insurance FAQs
Often not. A personal auto policy usually extends liability, and collision and comprehensive if you carry them, to a rental car in the US. Your deductible still applies, and some fees may not be covered.
A collision damage waiver (CDW) covers damage to the rental car. A loss damage waiver (LDW) usually covers damage plus theft and loss of use. Rental companies often use the terms interchangeably.
In most US states you are not required to buy the rental company’s optional coverage, but you must meet the state’s minimum liability requirements. Some countries require locally purchased coverage.
