Rental cars are a $30 billion per year business. Americans rent cars for business, for pleasure, and out of necessity when their own vehicles are in the shop. Whatever their motive, few renters give much thought to the question “do I need rental car insurance?”

This can be a mistake. Not everyone needs rental car insurance, but those who do tend to need it badly. Here are the facts every renter should know.

What Is Rental Car Insurance?

Rental car insurance is coverage specific to a vehicle that you are renting for the period of time that you rent it. It typically covers the same types of things that standard car insurance covers, such as:

  • Basic liability
  • Personal injury
  • Personal effects

In some cases, it can cover a wide range of things that may not be covered by standard insurance, as well. Examples include:

  • Administrative and claim fees if your rental car is in an accident
  • Lost keys
  • Non-accident damage to the vehicle’s body or interior
  • Other charges

Rental insurance may come as a comprehensive package. In other cases, you may be able to pick and choose which types of coverage you want to purchase. Policies are available from rental agencies or from third party providers.

Who Needs Rental Car Insurance?

Does everyone renting a car need rental insurance? Doesn’t regular car insurance cover rental cars?

These are the most common questions renters ask, and they are understandable. Most renters assume that their regular car insurance policies will cover a rental car.

In some cases, this is true. If you already have a car insurance policy, it should cover many of the basic insurance costs associated with a rental.

Your homeowners’ or renters’ policy should cover some costs, as well. For example, if your belongings are stolen from your rental car, their replacement will likely fall under your homeowners’ policy or the equivalent.

In most cases, however, standard insurance policies do not cover all potential costs associated with renting a car. You can find a good breakdown of what to expect in this article. Whether or not you need additional coverage depends on your:

  • Existing policy
  • Rental plans
  • Ability to cover potential expenses out-of-pocket

Benefits of Rental Car Insurance

If you have a strong existing car insurance policy and minimal rental needs, the additional cost of rental insurance may not be worthwhile. There are a few strong benefits to rental insurance that are worth considering, however.

First, it can provide extra coverage which can be ideal if your standard policy is very basic and doesn’t offer much coverage.

Second, filing a claim with your own insurance on a vehicle you do not own can be difficult. Rental insurance prevents these hassles.

Third, rental insurance can ensure that you have the coverage you need when you are outside the range of your own policy. For example, if you rent a vehicle while in another country, your personal auto coverage may not apply.

Enjoy Your Rental

Choosing the right kind of car and the right amount of rental car insurance can make your next rental a great experience. Check out our other great articles for the latest on the best cars to rent or own right now.