Kadrie Insurance Agency



5724 Villa Drive
Shoreview, MN 55126





Renting a Car? Explore Your Insurance Options

If you’re planning an outing, business trip, or vacation that includes an automobile rental, don’t wait until you approach the counter to think about your insurance situation. With some advance research, you might avoid paying for duplicate coverage or a hefty bill in the event of a mishap.

Assuming you have auto insurance or are covered as a driver on someone else’s policy (such as your parents’ policy), the personal auto coverage and deductibles you have in place will typically extend to a rented or borrowed vehicle — as long as it is being used for recreation and not for business.

Of course, this also means that drivers who don’t have collision or comprehensive coverage could be held financially responsible if a shiny new rental is stolen or damaged. Also be aware that personal auto insurance may not pay for the rental car company’s loss of use while a damaged vehicle is in the shop for repairs.


Before your departure, you may want to call your insurance agent and discuss whether your existing policy is sufficient. If it’s not, you might be able to add a rider that may be more affordable than the rental agency’s options.

If you’re going on a long trip or renting a car in another country, be sure to ask your agent whether there are any limitations that might apply to your situation, and take a copy of your insurance policy in case you need it (some rental companies may want proof of existing coverage).

Here are some other considerations when deciding whether to purchase the coverage offered in the rental company’s contract.

Over the Counter

Specific coverage options and associated costs vary by state and company, but car rental agencies will generally offer the following types of insurance protection. You may be asked to accept or decline the various options as they are presented in the rental agreement.

  • Collision damage waiver or loss damage waiver. This option typically relieves the renter of any financial responsibility if a vehicle is damaged or stolen, and may even include fees charged for loss of use, towing, and administration. However, waivers may be voided if an accident is the result of speeding, driving while intoxicated, or taking a vehicle off-road. Paying extra for a waiver may be unnecessary if you already have comprehensive and collision coverage on your own automobile.
  • Liability. Most states require rental companies to include a minimum level of liability coverage, but these amounts are generally low and don’t offer much financial protection. If you already have sufficient liability protection with your personal auto policy — or have an additional umbrella policy — you may not need to purchase any upgrade offered by the rental agency.
  • Personal accident insurance. This coverage provides accidental death and medical coverage for the renter and his or her passengers. Again, you may not need this coverage from the rental agency if you have enough health insurance coverage and/or personal injury protection with your existing auto policy.
  • Personal effects coverage. This type of protection will reimburse you for the theft of personal belongings from your rented automobile. Be aware that your homeowners or renters insurance policy may already include coverage for items stolen outside of your home, minus the deductible.

Non-Owner Insurance

A growing number of young people who live in big cities prefer not to own cars, but they still may need to drive on occasion. Drivers who rent or borrow cars frequently, or belong to a car-sharing service, may find that purchasing their own “non-owner car insurance” is cheaper than buying the liability policy from a rental car company. Non-owner policies cover the other driver’s car and injuries, but not your own, when you are at fault.

Credit-Card Benefits

Many credit cards may provide some collision or theft protection when the card is used to pay for the automobile rental. There may be limitations, however, and the claims are typically secondary to your personal auto policy or coverage purchased from the rental agency. In other words, the credit-card company might only pay your deductible or provide other limited compensation after other forms of coverage have paid the claim. Remember that credit cards may cover damage to the rental car but not for other cars damaged (or drivers who are hurt) in an accident.

Prior to booking a rental, consider calling the credit-card company’s customer service and ask about the benefits that would be offered if you paid with that particular card. If the company offers primary (as opposed to secondary) rental car coverage and you are involved in an accident, you might not have to file a damage or theft claim with your personal insurance company. (And you may be able to avoid having your premiums increased.) If you have more than one credit-card account, it might be helpful to compare them and use the card with the most generous coverage features.

Investigating which coverage benefits are included with your existing insurance policies and credit-card accounts prior to booking your rental could save you a significant amount of money and help avoid surprises.