Absolutely, you need rental car insurance—but you might already have it covered.

You’re not alone if you find yourself overwhelmed by the rapid-fire questions at the rental car desk. Will you prepay for gas or fill the tank? Are there additional drivers? Do you want to add insurance? It can leave anyone feeling a bit dazed, regardless of the length of your trip.

Experienced travelers are likely familiar with some perks offered by specific credit cards—like access to airport lounges and free checked baggage—but buried in the fine print is a wealth of other benefits. Many (though not all) credit cards include rental car protection. Plus, if you have your own vehicle, your personal auto insurance typically covers rental cars as well. With this level of coverage, do you really need to buy additional insurance at the rental counter?

The simple answer is no, provided you used the qualifying credit card to pay for the rental and have checked your personal insurance policy to confirm that it meets your needs. However, if you find the coverage lacking or tend to worry, it might be worth considering additional protection. Many drivers believe the extra peace of mind justifies the expense.

We’ll guide you through the intricacies of rental car insurance policies below (and trust us, it’s more engaging than it sounds).

Types of Rental Car Insurance

Rental car insurance falls into two main categories—primary and secondary—representing either a first line or additional layer of protection.

Primary Insurance

Typically, your personal auto policy acts as primary coverage for rental cars. However, you can opt to buy a 'collision damage waiver' from the rental agency to serve as your primary insurance. This waiver covers damages in the event of an accident, sparing your personal insurance from being involved. It can be pricey—around $20 to $30 per day—but if you want to keep your personal car insurance premiums low, you may prefer not to file a claim for a rental car incident, as it could raise your rates over time.

If you lack personal vehicle insurance or choose not to utilize it, you might want to consider purchasing supplemental liability insurance from the rental company. This is another form of primary coverage that protects you against liability or injury claims from others. It's distinct from a collision damage waiver and can add an extra $15 to $20 per day to your total cost.

Secondary Insurance

Secondary insurance, often offered by many credit cards, covers expenses that your primary rental car insurance doesn’t, after any applicable deductible has been paid.

Coverage from Your Personal Auto Insurance or Credit Card

If your personal auto insurance includes primary coverage for rentals (which it typically does), purchasing insurance from the rental company effectively means you're paying for the same coverage twice. Most credit cards provide only secondary coverage, although some premium cards, like Chase Sapphire Reserve, Chase Sapphire Preferred, Citi Prestige, and the United Explorer Credit Card, may offer primary rental car insurance as part of their benefits.

If you don’t own a car with insurance or opt not to buy primary coverage from the rental agency, your credit card coverage—which usually acts as secondary insurance—will automatically become your primary coverage, since there's no primary policy to rely on. In this scenario, the coverage extends to include both collision and liability protection.

The Top Three Scenarios for Rental Car Coverage

If you have personal auto insurance and a standard or premium credit card, you're likely fully covered. Your personal policy acts as primary insurance, while your credit card provides secondary coverage.

If you only possess a standard credit card (and no personal auto insurance), you might want to consider buying extra coverage from the rental agency for added protection. However, if your card offers secondary insurance, it will automatically upgrade to primary coverage if no other policies are in effect; be sure to review the fine print to confirm the policy's adequacy.

If you have a premium credit card (and no personal auto insurance), you will be covered with primary insurance as long as you use the card to pay for your rental. Since these premium policies usually offer more comprehensive coverage, purchasing additional insurance from the rental company may not be necessary.

Regardless of your existing coverage, be aware that it may not apply to all types of rental vehicles. More expensive options like convertibles or SUVs may not be covered, along with common exclusions such as pickup trucks, vans, and motorcycles. Certain credit cards may specify car brands not included in protection, such as Porsche, Tesla, and Jaguar. Sticking to a midsize car is generally a safe choice.

The Risks of Waiving Rental Car Insurance

If you find yourself in an accident without sufficient coverage, you could be held responsible for any incurred costs. This is particularly crucial if you plan to drive in cities, on highways, or embark on long journeys—some form of protection is vital. If you’re depending solely on your credit card benefits, consider adding supplemental primary insurance from the rental agency for extra coverage in case you cause damage or injury to others.

All U.S. states, except California, mandate that car rental companies offer minimum liability coverage included in the rental rate. Unfortunately, these minimums are quite low and would always act as secondary to your personal auto insurance.

“Many renters without a personal vehicle don’t realize that damage to the rental car is just part of the equation,” says Jonathan Weinberg, founder and CEO of AutoSlash.com, a site dedicated to helping consumers find great car rental deals. “If you're involved in an accident and found at fault, you could be liable for damage to someone else's property or for injuries you cause. In a serious accident, these costs could easily exceed $100,000, so it’s crucial to understand exactly what your coverage entails.”

Weinberg advises at least obtaining the liability insurance offered by the rental company if you lack auto insurance to mitigate significant risk.

Buying Rental Car Insurance from a Third Party

Companies like Sure and Allianz offer rental car coverage independently from rental agencies, making them worth exploring beforehand. Weinberg notes that third-party rental car insurance for short durations is an excellent option for those lacking primary coverage via a credit card or personal auto insurance, often at a lower cost than what rental companies charge. If you rent cars more than a few times a year, he also suggests that purchasing a non-owner's policy from a third-party provider can be more economical, typically covering both collision and liability.

Do You Need Rental Car Insurance When Traveling Abroad?

If you find yourself driving on the 'other' side of the road or navigating unfamiliar terrain, having insurance can provide an essential safety net. However, there are additional steps you should take.

Most importantly, many credit card companies and personal auto insurers do not extend coverage for car rentals in specific foreign countries. Always check the fine print to identify any potential exclusions.

It's also worth noting that some credit cards providing secondary insurance may automatically upgrade to primary coverage (along with additional benefits) if your personal insurance doesn’t apply in the country you’re visiting. It’s a good idea to reach out to your credit card benefits department to clarify this detail in advance. The Citi Prestige card is well-known for offering primary insurance for most car rentals abroad.

Having rental car insurance can be particularly important when you’re traveling in a country where you don’t reside, as handling car rental damage issues from abroad can be quite challenging. In such cases, having insurance to manage the details can truly be a lifesaver.