Rental car insurance costs between $15 and $50 per day at most rental agencies, depending on the coverage type you choose and where you rent

The price you pay depends on three things: which coverage options you add, the rental company's markup, and your location. A basic collision damage waiver (CDW) — which covers damage to the rental car itself — typically runs $10 to $30 per day. Liability coverage, which covers damage you cause to other people or property, costs $5 to $15 per day. Theft and comprehensive coverage add another $5 to $10 per day. Some rental companies bundle these into a single daily rate; others charge separately for each.

Your existing auto insurance and credit card may already cover rental cars, which means you could decline the rental company's coverage entirely and pay nothing extra. Before you rent, call your insurance agent or check your credit card's rental car benefits — this single step often saves $30 to $150 on a week-long rental.

Key Takeaways

  • Rental car insurance from the rental company costs $15 to $50 per day, but your personal auto insurance or credit card may cover rentals at no additional cost.
  • Collision damage waiver (CDW) covers damage to the rental car; liability covers damage you cause to others; comprehensive covers theft and weather damage.
  • Your credit card's rental car coverage usually requires you to decline the rental company's insurance and charge the full rental to that card.
  • If you have no personal auto insurance and your credit card offers no rental coverage, you must buy the rental company's insurance to protect yourself legally.
  • Rental companies charge different rates for the same coverage, so comparing prices between Hertz, Enterprise, and Avis before you book can save money.

What your personal auto insurance covers at a rental car company

Your own auto insurance policy typically covers rental cars for the same types of damage it covers your personal vehicle. If your policy includes collision coverage, it covers damage from accidents. If you have comprehensive coverage, it covers theft, weather, and vandalism. The deductible on your rental car claim is usually the same as your personal vehicle deductible — often $500 to $1,000.

The catch is that your coverage only works if you decline the rental company's insurance. If you buy the rental company's CDW, your personal insurance becomes secondary, meaning you file a claim with the rental company first. This can complicate the process and may raise your personal insurance rates if you file a claim. Most people with good auto insurance decline the rental company's coverage and rely on their own policy instead.

If you have no auto insurance at all, you cannot rely on this route. You will need to buy the rental company's coverage or use your credit card's rental car protection.

How credit card rental car coverage works

Many premium credit cards — particularly travel rewards cards and American Express cards — offer rental car damage coverage at no extra cost. This coverage typically covers collision and comprehensive damage to the rental car, similar to what a CDW provides. The coverage usually applies only if you charge the entire rental to that card.

To use your credit card's coverage, you must decline the rental company's insurance at the counter. If you buy the rental company's coverage, your credit card coverage will not apply. Before you rent, log into your credit card's website or call the customer service number on the back of your card to confirm what rental car coverage it offers and what the limits are.

Credit card coverage typically does not include liability — damage you cause to other people or their property. If you cause an accident and injure someone or damage their car, you need liability coverage. Your personal auto insurance covers this, or you can buy the rental company's liability coverage for $5 to $15 per day.

Liability coverage: what it is and why you need it

Liability coverage pays for damage or injuries you cause to other people when you are at fault in an accident. If you hit another car and injure the driver, liability coverage pays for their medical bills and vehicle repairs. If you damage someone's property — a fence, a storefront, a parked car — liability coverage pays for that too.

Your personal auto insurance includes liability coverage if you carry it. Most states require drivers to carry a minimum amount of liability coverage, typically $25,000 to $50,000 per person injured. If your personal policy meets your state's minimum, it covers you in a rental car too.

If you have no auto insurance, you must buy liability coverage from the rental company. Without it, you are personally responsible for any injuries or damage you cause, which can mean thousands of dollars in out-of-pocket costs. Rental company liability coverage costs $5 to $15 per day and is one of the most important protections you can buy.

Collision damage waiver versus comprehensive coverage

A collision damage waiver (CDW) covers damage to the rental car from accidents — hitting another vehicle, running into a pole, flipping the car. It does not cover damage from theft, weather, or vandalism. A CDW typically costs $10 to $30 per day and comes with a deductible of $0 to $1,500, depending on the rental company and the coverage level you choose.

Comprehensive coverage covers damage from events outside your control: theft, hail, flooding, vandalism, or hitting an animal. It costs $5 to $10 per day and usually has a deductible of $500 to $1,000. Some rental companies sell comprehensive as an add-on to CDW; others bundle them together.

If your personal auto insurance includes both collision and comprehensive, you do not need to buy these from the rental company. If you have only liability coverage (which is common for drivers who own older cars), you may want to buy CDW and comprehensive from the rental company to protect yourself during the rental period.

When you should buy rental car insurance from the company

Buy the rental company's insurance if you have no personal auto insurance and your credit card offers no rental car coverage. In this case, you need both collision/comprehensive coverage and liability coverage to protect yourself legally and financially.

You should also consider buying it if you are renting an expensive car or a car you are unfamiliar with and you are worried about causing damage. Some people also buy it for peace of mind on long road trips or when driving in unfamiliar areas, even though their personal insurance would cover them.

Do not buy it if your personal auto insurance covers rentals and you are comfortable with your deductible. Do not buy it if your credit card offers rental car coverage and you are charging the rental to that card. In both cases, you are paying twice for the same protection.

How to compare rental car insurance prices

Rental companies charge different rates for the same coverage. Enterprise may charge $12 per day for CDW while Hertz charges $18 per day. Before you book, get a quote from at least two companies and compare the total cost of the rental plus insurance.

When you compare, make sure you are looking at the same coverage. Some companies include a low deductible in their base CDW price; others charge extra for zero-deductible coverage. Some bundle liability into a single daily rate; others charge it separately. Read the quote carefully and add up the total daily cost.

You can also call the rental company after you book and ask if they offer any discounts on insurance for members of AAA, AARP, or other organizations. Some companies waive or reduce insurance costs for members, which can save $5 to $10 per day.

Frequently Asked Questions

Does my credit card cover rental cars in other countries?

Most credit card rental car coverage applies only to rentals in the United States and Canada. If you are renting a car in Europe, Asia, or elsewhere, check your card's terms before you travel. Many cards exclude international rentals, so you may need to buy the rental company's coverage or purchase a separate travel insurance policy.

What happens if I decline all insurance and get into an accident?

If you decline the rental company's insurance and your personal auto insurance does not cover rentals, you are personally liable for all damage to the car and any injuries or property damage you cause. The rental company will bill you for repairs, which can cost thousands of dollars. This is why checking your personal insurance and credit card coverage before you decline is critical.

Can I buy rental car insurance after I pick up the car?

Most rental companies allow you to buy or add coverage at the counter when you pick up the car, but prices are often higher than if you buy online before you arrive. Some companies also charge a higher daily rate if you add coverage after you have already declined it. It is better to decide on coverage before you book or at least before you arrive at the rental counter.

Does rental car insurance cover damage from bad weather like hail or flooding?

Yes, if you buy comprehensive coverage. Comprehensive covers weather-related damage, theft, and vandalism. Collision damage waiver covers only accident damage. If you are renting during storm season or in an area prone to flooding, comprehensive coverage is worth the extra $5 to $10 per day.

What is the difference between a deductible and a damage waiver?

A deductible is the amount you pay out of pocket if damage occurs — for example, a $1,000 deductible means you pay $1,000 and insurance covers the rest. A damage waiver means the rental company waives the deductible, so you pay nothing if damage happens. Zero-deductible coverage costs more per day but eliminates your out-of-pocket risk.