Does your auto insurance cover rental cars?

Your personal auto insurance, including all limits and deductibles, extends to almost any rental car you drive. That means, if you carry comprehensive and collision coverage on your daily ride, you'll be protected against physical damage to your rental car. Your liability coverage also applies when you get behind the wheel of a rented vehicle.

Do you need rental car insurance?

In most instances, rental car insurance overlaps with your personal auto policy and you won't need to pay for duplicate coverage. However, there are situations where it makes sense to pick up rental insurance. Understand what your personal auto policy covers before opting to sign up for rental insurance.

PRO TIP: Rental car insurance vs. rental car reimbursement

Rental car insurance covers you and the rental car you're driving at the time and is offered by the company you rent the car from. Rental car reimbursement covers the cost of your rental car while your vehicle is being repaired after a covered accident. If you would like to be reimbursed for the cost of your rental car, you'll need to add rental car reimbursement coverage to your personal policy.

Rental car insurance coverages you may already have on your auto or home policy:

Liability: Since nearly every state requires liability insurance, your personal auto policy already protects you against any damage or injury you cause while driving a rental car, up to the limits of your policy.

Loss-damage waiver: If your rental car is stolen, vandalized, or damaged in an accident, a loss-damage waiver means you won't be held responsible by the rental car company. This can also be referred to as a collision damage waiver by some rental car companies. While the waiver is relatively inexpensive, you're already covered for physical damage to your rental car if you carry comprehensive and collision on your auto policy. Comprehensive covers damage from events out of your control: theft, fire, vandalism, weather-related issues, and hitting an animal. Collision protects against damage from accidents involving another vehicle or object.

Personal accident insurance: Personal accident coverage protects against injuries to you and your passengers while driving a rental car. However, if you already have medical payments coverage or personal injury protection (PIP) on your auto policy, you're likely covered for medical bills resulting from an auto accident involving the rental car. Your health insurance coverage may also determine whether personal accident coverage is needed.

Personal effects coverage: Generally inexpensive and available from most rental car companies, personal effects coverage covers personal items stolen from a rental car. However, your belongings are already covered under your personal property insurance on your homeowners, condo, or renters policy — even while traveling away from home in a rental car.