Can I Rent a Car Without Insurance?

Renting a car can be a little pricey depending on what type of vehicle you rent and how long you need the car. This is doubly true if you are under the age of 25, in which case you might have extra fees to pay. Adding insurance on top of the bill can seem expensive and, at times, unnecessary, even if insurance provides you with peace of mind and financial protection.

So, can you rent a car without insurance? Let’s break down the answers to this question and more below.

How Does Rental Car Insurance Work?

For any commercial car rental company to operate safely, they have to have insurance for their vehicle fleets to cover unexpected damages or destroyed cars due to accidents, user mistreatment, and so on. Rental car companies always have insurance for the individual vehicles they lend to users.

However, car rental companies will charge users if they are directly responsible for any damage to the vehicles they rent to pay for that insurance. For example, if a driver rents a normal sedan from a car rental company, then gets into an accident because they were texting and driving, the driver may be on the hook for the majority of all of the damages caused by the accident.

In most cases, any damages or fees are charged to the driver’s personal car insurance. But this is a little different if the driver in question doesn’t have personal car insurance at the time of rental.

Can You Rent a Car Without Insurance?

Yes—car rental companies will allow you to rent a car even if you don’t have personal car insurance. After all, many of the people who rent cars in the first place are those who don’t own cars, so they don’t pay for insurance they don’t normally need.

That said, you may be charged an extra fee if you rent a car without proper insurance. You will also be offered several company policies to acquire temporary insurance for the vehicle while you rent it.

Depending on the car rental company you decide to rent from, you could see several different rental car insurance options.

Most car rental companies offer a flat insurance coverage option for between $30 and $100 on top of the rental bill. This covers you for up to a certain amount of damage (i.e. $50,000 or $75,000) in damages. If you get into an accident, any costs up to those limits will be covered. Insurance amounts may vary by vehicle classification, as well.

Car rental companies may also provide specific or ancillary insurance policies. These include:

• Loss damage waiver insurance or LDW. Loss damage waivers cut down on how much you have to pay for damages to the car in the event of an accident. If you already have personal insurance, you won’t have to pay a deductible if you have an LDW policy and get into an accident
• PEP or personal effects protection, which is insurance for the loss or damage of any personal belongings you leave in the vehicle. This is most valuable if your rental vehicle is at risk of being stolen or broken into
• PAI or personal accident insurance, which includes additional insurance benefits for accidental death or emergency medical costs for the renter and any passengers in the rented vehicle

Other companies may offer additional insurance policies or secondary plans in addition to these main offerings.

But you don’t have to choose from any of these insurance policies. You can decide to rent a car and take it onto the road without any form of insurance or coverage whatsoever. But this is not recommended.

Should You Rent a Car Without Insurance?

If you decide to rent a vehicle without insurance and get into an accident, you will be responsible for the damages in that accident. If you don’t have any personal car insurance at the same time, that means you could be financially on the hook for hundreds or thousands of dollars depending on the specifics of the accident.

Your car rental company will not foot the bill for the accident costs. They will bill you for the accident costs instead, using the payment method you provided them to rent a vehicle in the first place.

For example, say that you rent a car and use a credit card to finance the reservation. You then get into a minor bumper accident with another driver. Since you don’t have any insurance, you have to pay $300 to replace the broken bumper out of pocket.

It’s easy to imagine how high the costs could go if you become involved in a more serious accident. Because of this possibility, you should not rent a car without at least some type of insurance. Car rental companies offer the policies mentioned above so that you can remain covered even if you don’t have personal car insurance.

Personal vs. Rental Company Insurance

If you have a personal car insurance policy, it may interact with rental company insurance policies in several ways.

For example, the above-mentioned LDW policy from car-rental companies works with your personal car insurance plan. Normally, you’ll have to pay a deductible if you damage your rental car. If you have an LDW policy from the rental company, you won’t have to pay that deductible.

Furthermore, most car rental companies have a clause in their contracts that prevents their insurance from kicking in until after your personal insurance has been used to cover any costs possible. If you are involved in an accident with $10,000 worth of damage, for example, and your personal insurance policy covers $8000 of damage, your rental company’s insurance will only be on the hook for $2000.

Which should you choose? Personal car insurance is only necessary if you own your vehicle outright and are renting a car for a short amount of time, such as if your car is undergoing repairs.

If you don’t own a vehicle, it’s highly recommended that you purchase rental insurance from your car rental company for the duration of your rental contract. While you may not end up getting into an accident, you’ll have peace of mind with insurance and won’t be financially devastated if your rental vehicle is damaged in some way.

Summary

In the end, you can rent a car without insurance, but it’s never a good idea. There is simply too much financial risk on the line for driving without insurance to be a wise idea, which is the big reason why most states require licensed drivers to have auto insurance in the first place.

Take advantage of the ease of insurance that rental car companies provide and sign up for an insurance policy when you rent a new set of wheels. Advantage Rent a Car also provides insurance for our fleet of quality vehicles, which can be rented at many popular airports and other locations. Check out our catalog today and contact us for more information about our insurance policies.

Sources:

Do I Need Rental Car Insurance? | Allstate
loss damage waiver (LDW) | Wex | US Law | LII / Legal Information Institute
What is Rental Car Insurance and Do I Need It? | Credit Karma