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Renting a Car This Summer? Here’s Whether You Actually Need Their Insurance

Aug 10, 2026

By Kelly Conway, CIC, CRM
Owner, Conway Insurance Agency

“Do I really need rental car insurance?” We get this question a lot this time of year. A client asked me a version of it just recently: “Will my auto insurance cover me, or will I need to add the coverage from the rental counter?” It’s a great question because the answer really depends on three things: the rental company’s coverage, your own auto policy, and the rental car benefits that may already come with your credit card. And the wrong decision at the counter can cost you hundreds, or even thousands, of dollars after an accident.

Summer means flights, road trips, and a lot of you standing at a rental counter while the agent asks if you’d like to add coverage. I’ll be honest with you: the answer isn’t black and white. It depends on what you already have, where you’re going, and what you’re renting. So let’s walk through it together, the way I would if you called the office.

Start With What You Already Have

Before you decide whether to buy anything at the counter, it helps to know what you’re already carrying in your wallet. In a lot of cases, you’re more covered than you think.

Your personal auto policy

As long as your own auto policy includes comprehensive and collision coverage, that coverage generally extends to a rental car you’re driving for personal use. The same protection that follows your own vehicle usually follows you into the rental, and your liability limits typically come along too. The catch is that your deductible comes with it. If you carry a $1,000 deductible on your own car, that’s what you’d pay out of pocket on the rental as well.

Your credit card

A lot of credit cards offer some rental car coverage when you pay with that card. But it’s worth knowing the limits. Most cards give you secondary coverage, which means it only kicks in after your own auto insurance has paid. A few premium travel cards give you primary coverage. Either way, the card usually only covers damage to the rental car itself. It won’t cover you if you hurt someone or damage their property, and many cards leave out certain vehicle types and countries. Call your card company before you travel so you know what you actually have.

So Where Does the Rental Company’s Coverage Actually Earn Its Keep?

Here’s the part most people miss. Even when your own policy extends to the rental, the rental company’s coverage can fill real gaps that your auto insurance was never designed to cover. There are usually four options offered at the counter:

  • Collision Damage Waiver (CDW) / Loss Damage Waiver (LDW). Not technically insurance, but a waiver where the rental company agrees not to charge you for damage to or theft of the car.
  • Supplemental Liability Insurance (SLI). Adds liability protection above what you already carry, which can matter if your personal limits are on the lower side.
  • Personal Accident Insurance (PAI). Covers medical costs for you and your passengers after an accident.
  • Personal Effects Coverage (PEC) vers your belongings if they’re stolen from the rental
The real reason I tell clients to at least consider the waiver comes down to three charges your personal auto policy typically will not pay:
Loss of use. If the rental car is in the shop after an accident, the rental company can bill you for the income they lost while that car couldn’t be rented out. This can run into the hundreds of dollars, and most personal policies don’t cover it. What surprises people most is the timing. The bill often shows up weeks after they’ve returned home and moved on from the trip.
Diminished value. A repaired car is worth less than one that was never wrecked, and the rental company may charge you for that lost value.
Administrative and towing fees. Rental companies often add charges for processing a claim, towing, and storage. These are exactly the kinds of fees a standard auto policy leaves on your plate.
And here’s why I’m raising this now: we’ve had more clients come home from a trip and get a bill weeks later for diminished value or loss of use, the money the rental company says it lost while the car sat in the shop being repaired. It catches people off guard, because their own auto policy doesn’t pay it.
Buying the waiver can also mean skipping your deductible and avoiding a claim on your own policy, which helps protect your rates down the road. For a lot of travelers, that peace of mind is worth the daily cost. It’s a personal call, and one I’m always happy to talk through before a trip.

A Special Note on Turo and Peer-to-Peer Rentals

Renting through Turo or a similar peer-to-peer service is a different animal, and the rules aren’t the same as a traditional rental counter.

Your personal auto policy may provide coverage in excess of other existing insurance during a peer-to-peer rental, meaning it sits on top of whatever the platform provides. Coverages that may extend include liability, physical damage, uninsured and underinsured motorist, personal injury protection, medical payments, and roadside assistance. As always, all of your policy’s provisions and exclusions still apply.

But some coverages will not extend to a peer-to-peer rental, including ride-for-hire use, transportation expense, and auto replacement. Because the coverage picture is trickier here, this is exactly the kind of trip worth a quick phone call to us before you book.

Traveling Internationally? Don’t Assume Your Credit Card Covers You

This is the one I really want you to hear because it catches careful travelers off guard. A lot of people assume their credit card covers a rental car no matter where they go. That’s not always the case. Some card companies exclude certain countries from rental coverage entirely. Italy is one of the most common, and Australia and New Zealand often appear on those lists as well.

If you’re renting overseas, don’t assume your credit card has you covered. Take a few minutes before your trip to review your card’s rental car benefits and any country exclusions. American Express, for example, publishes a list of countries where its coverage doesn’t apply. If your destination isn’t covered, the rental company’s protection may be your best option. Spending a few minutes checking before your trip can save you a lot of confusion at the rental counter.

Whether you’re renting for a family vacation, a business trip, or an international getaway, taking a few minutes to review your coverage before you leave can save you time, money, and uncertainty at the rental counter.

Before You Pick Up Your Rental Car, Check These Four Things

You don’t need to overthink this at the counter. A few minutes before your trip will save you the guesswork:

  1. Your auto policy. Confirm you carry comprehensive and collision, and know your deductible. That’s what follows you into the rental.
  2. Your credit card. Call the issuer and ask whether your coverage is primary or secondary, and what it excludes.
  3. Your gaps. Decide how you feel about loss of use, diminished value, and admin fees, since those are on you unless the waiver covers them.
  4. Your trip type. Traveling internationally, renting through Turo, using the car for business or rideshare, or renting without your own car all change the answer. When in doubt, ask.

The Bottom Line

You may not need the rental company’s coverage if you have a solid auto policy and a credit card that fills some of the gaps. But that doesn’t automatically mean it’s the wrong choice, either. Things like loss of use, diminished value, administrative fees, and your deductible are all worth thinking through before your trip. Every traveler, every rental, and every destination is a little different.

The smartest move isn’t deciding at the rental counter with a line of people behind you. It’s knowing your options before you go.

Before your next trip, give us a quick call or send us a text. We’ll review your current auto policy, explain exactly what follows you into a rental car, identify any gaps, and help you decide whether the rental company’s coverage makes sense for your trip.

Our goal has always been simple: help you understand your coverage before you ever need it, so you can travel with confidence.

Kelly Explains

The takeaway
The best time to figure out your rental car coverage isn’t at the rental counter, it’s before your trip.
A quick conversation now can help you understand your options and travel with confidence.

Kelly Conway, CIC, CRM
Conway Insurance Agency
conwayagencytx.com | 512-345-0005

Kelly Conway is the owner of Conway Insurance Agency in Austin, Texas, and has more than 15 years of experience helping Central Texas families and business owners make confident insurance decisions. Through her Kelly Explains series, she breaks down complex insurance topics into practical, easy-to-understand advice so people can understand their coverage before they ever need it.

Frequently Asked Questions

Does my personal car insurance cover a rental car?

Does my personal car insurance cover a rental car?
Generally, yes, as long as your policy includes comprehensive and collision coverage and you’re driving the rental for personal use. Your liability limits and your deductible typically apply to the rental just as they would to your own car.

Do I still need the rental company’s coverage if my credit card covers rentals?

Maybe. Most credit card coverage is secondary and only pays after your auto insurance, and it usually covers only damage to the car, not liability. It also often won’t cover charges like loss of use or administrative fees, which is where the rental company’s waiver can still be worth it.

administrative fees, which is where the rental company’s waiver can still be worth it. What is loss of use on a rental car?

Loss of use is the income the rental company loses while a damaged car sits in the shop and can’t be rented out. They can bill you for it after an accident, and most personal auto policies do not cover it. The rental company’s waiver often does.

Does my auto insurance cover Turo or other peer-to-peer rentals?

It may provide coverage in excess of what the platform offers, including liability, physical damage, uninsured/underinsured motorist, PIP, medical payments, and roadside assistance, subject to your policy’s terms. Some things, like ride-for-hire use, transportation expense, and auto replacement, will not extend. Peer-to-peer is worth a call before you book.

Does my insurance cover a rental car in another country?

cards leave out certain destinations entirely, with Italy, Australia, and New Zealand being common examples. Check your card’s excluded-country list before you go. If it doesn’t cover your destination, the rental company’s coverage usually becomes far more important.

Should I still buy the rental company’s coverage if I already have full-coverage auto insurance?

Maybe. Full coverage on your own car usually follows you into the rental, so you may not need theirs to protect the vehicle. But your policy still won’t pay charges like loss of use, diminished value, or admin fees. If you’d rather not risk those, or you’d rather not file a claim on your own policy and affect your rates, the rental company’s coverage can still be worth it.

How much does the rental company’s coverage usually cost?

It varies by company, location, and which options you choose, but the counter add-ons often run somewhere in the range of $15 to $35 a day each. That can add up fast on a long trip, which is why it’s worth knowing ahead of time what you already have and what you actually need.

Will buying rental car insurance keep me from filing a claim on my own policy?

In many situations, yes. If you purchase the rental company’s Collision Damage Waiver (CDW or LDW), the rental company may handle damage to the rental vehicle without involving your personal auto policy. That can help you avoid paying your deductible and may keep the claim off your own policy. Coverage varies, so it’s worth understanding exactly what the waiver includes before declining it.