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What is rental car coverage and how does it work?

Understand your coverage before buying insurance for rental cars.

It's usually a standard question at a rental car company counter: "Do you need rental car insurance?" Considering the rental car company has insurance on their car, you have insurance on your personal car and you may also have rental coverage available through your credit card, what should you do? This type of “insurance”, technically a waiver, may help to cover costs should the car become damaged or incapacitated during your rental time. Here's how to sort out the specifics.

What is rental car insurance coverage?

Typically, coverage through a rental car company falls into five categories:

Do I need rental car insurance?

Many personal vehicle insurance policies already include some sort of car rental insurance coverage — so if you purchase a rental car policy, you're paying extra when you may not have to. Let your State Farm® agent know the reason for the rental so they can help assess how coverage from your personal vehicle policy might apply. Then, ask your agent these key questions:

Does my credit card cover rental car insurance?

If you pay for a rental car with a major credit card, the card issuer may offer secondary car rental insurance at no charge. In general, this coverage will be used after your personal auto insurance policy is used. Keep in mind that credit card coverage varies from card to card and the institutions which issue the cards. This coverage typically only helps with additional expenses such as reimbursing your insurance deductible. Exotic, expensive or larger vehicles may not be covered by credit cards.

Refer to your card’s website for information about available rental car coverage or call the number on the back of the card to inquire.

Review your rental coverage options

Don’t sign anything or agree to coverage without reading the policy thoroughly. Insurance requirements and rules vary from state to state.

What if I’m using a car sharing or a peer-to-peer service?

Do I need international car rental insurance when abroad?

Contact your agent and credit card company well in advance of your trip. Paying for international coverage might help if you have an accident or the vehicle is stolen while traveling abroad.

Renting for work or play?

Coverage extensions from your existing policy or your credit card may not apply if you're renting a car for business. In that case, review the coverage options through your employer.

Select the right size rental vehicle

When reserving a car, know how many people will be traveling with you and how much luggage room you will need. You'll want to have enough space to see clearly out of each window and to keep passengers comfortable. Remember, middle seats are often small for adults but typically fine for children, unless car seats are needed. If you need room for more than four adults, consider choosing a vehicle with a third row.

Inspect the rental car

Give the car a once-over to check the following before driving off:

Also double-check that the car is equipped with important safety features, and verify that the add-ons you agreed to are present and functioning appropriately.

Now that you have read about car rental insurance coverage, you may also be interested to learn about summer driving tips, how to be careful in rest areas or suggestions to prevent falling asleep while driving.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

State Farm Mutual Automobile Insurance Company State Farm Indemnity Company State Farm Fire and Casualty Company State Farm General Insurance Company Bloomington, IL

State Farm County Mutual Insurance Company of Texas State Farm Lloyds Richardson, TX

State Farm Florida Insurance Company Winter Haven, FL

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