This article has been updated since its original publication on February 19, 2025.
Renting a car is a convenient way to explore new places during vacation, whether you are traveling within the U.S. or abroad. While the process is typically simple, one important decision many travelers face at the rental counter is whether to purchase the additional insurance coverage offered.
At first glance, it may seem unnecessary — especially if you already have personal auto insurance. However, there are several reasons our insurance agents now recommend purchasing extra protection.
Your personal auto policy may extend some coverage to rental vehicles, but it often comes with limitations. For example, coverage may vary depending on where you are traveling, the type of vehicle you rent, and your deductible. If something happens, you could be responsible for out-of-pocket costs before your insurance applies.
Rental companies typically offer coverage options such as collision damage waivers, liability protection, and loss-of-use coverage. These protections can help eliminate financial risk if the vehicle is damaged, stolen, or involved in an accident. In many cases, rental coverage allows you to walk away without dealing with a claim on your personal policy.
Another important factor is convenience. Filing a claim through your personal insurance can take time and may impact your future premiums. If you are involved in an accident, purchasing rental coverage can simplify the process and may help keep your future premiums from increasing.
If you are traveling internationally, supplemental coverage becomes even more important. Insurance laws and requirements vary by country, and your personal policy may not provide adequate protection outside the U.S.
When renting a car and driving in Canada, most U.S. auto policies extend coverage automatically, so a valid U.S. insurance card is typically sufficient for both rental companies and law enforcement. Although some travelers request a Canadian Non-Resident Inter-Province Motor Vehicle Liability Insurance Card (often called a “yellow card”).
For those who prefer to have one, the card must be requested from the insurance carrier, and not all companies issue it. Availability and turnaround times vary, so it is best to request it from your insurance agent at least three weeks before your trip.
Renting an RV is another popular vacation choice for many travelers. If you decide to rent an RV instead of buying one, always purchase the physical damage waiver insurance offered by the RV rental company. Your probability of an accident increases tremendously when driving an RV and the repair costs for a damaged vehicle can increase quickly. For more information on RV travel, checkout the article Safe Driving in Your RV.
Before your next vacation, we recommend reviewing your current auto policy and discussing your options with your agent. A quick conversation can help you travel with confidence — knowing you are properly protected no matter where the road takes you.
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