Does Your Auto Insurance Cover Your Rental Car When Traveling in the U.S. or Abroad?

By Larry Anderson and the Mercury Team

You’re planning a bucket-list trip across Europe, or maybe you’re renting a car to drive the family along the East Coast for a sightseeing vacation. Before you sign any rental agreement, you’ll want to be sure that you have adequate personal or international car insurance in the event of an accident, damage, or theft.

“Coverage requirements and protections can vary significantly between domestic and international rentals, so it’s important to review your policy and rental car agreement carefully before you hit the road,” says Larry Anderson, Director of UW Operations for Mercury Insurance.

Mercury is here to help you understand your coverage and make smart choices before hitting the road, whether across state lines or across international borders.

Does Auto Insurance Cover Rental Cars in the U.S.?

There’s a good chance that your auto insurance coverage extends to any rental cars you may reserve. That means if you already carry liability, collision, and comprehensive coverage on your personal policy, those protections usually apply to your rental vehicle as well. There can, however, be exceptions. Coverage depends on your policy type, deductibles, and any restrictions your insurer has in place. Be sure to confirm details with your provider before renting a car in the U.S.

Do You Need to Buy Extra Coverage From the Rental Company?

Rental companies usually offer supplemental insurance packages at the counter. That coverage includes collision damage waivers, liability insurance supplements, and personal accident and effects coverage. However, this policy may be unnecessary if your personal auto insurance applies. Check your deductibles and coverage limits before declining the rental insurance.

Does Your Auto Insurance Cover Rental Cars in Foreign Countries?

Here’s where things change. While most U.S. auto policies extend coverage to rentals within the country, many don’t apply once you cross international borders. Some insurers do extend coverage if you’re traveling through Mexico or Canada, but you’ll need to check before you go.

In places like Europe, Asia, and Africa, local laws often require you to have separate rental insurance. That way, you’re not personally liable for damages, medical bills, and legal penalties while abroad. Always verify local insurance rules.

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What Options Do You Have for International Rental Coverage?

If your U.S. auto policy doesn’t apply, you still have several choices for overseas rental car insurance coverage. You can:

• Buy insurance from the rental agency overseas. The local laws often require this to ensure you meet the country’s regulations.
• Use credit card rental car protection if available. Wondering whether your credit card covers rental car insurance? Many travel credit cards offer secondary coverage if you pay for the rental with that card. This protection usually kicks in only after your primary insurance is used, and exclusions, such as for luxury cars or long rentals, are common. Read the fine print, and call your issuer prior to travel.
• Consider a travel insurance policy with rental coverage. Some international car insurance or travel plans include collision damage protection and liability coverage for rental cars, offering an extra safety net while overseas.

What Are the Risks of Driving Without Proper Rental Coverage?

Skipping rental insurance while touring the Loire Valley of France or the Pacific Northwest of the United States might save you a few dollars at the rental counter, but at what cost? Consider the ways you may be liable if there’s an issue or an accident:

• Out-of-pocket costs can quickly add up, and you may have to pay for a windshield replacement, a new bumper, or potentially a new vehicle in the event of a theft.
• Legal issues in foreign countries, if you remain uninsured, may mean hefty fines, vehicle impoundment, or worse.
• Strain on your personal finances can take its toll, and if you don’t have travel car insurance or international coverage, even a small fender bender can potentially drain your savings.

Why Mercury Insurance Can Help With Rental Car Coverage

At Mercury, we understand that renting a car, whether at home or abroad, comes with questions. That’s why we provide:

• Clear guidance on coverage. Our Mercury agents can explain whether your personal policy extends to rentals and under what conditions.
• Affordable coverage options. Our comprehensive policies can include rental car coverage, ensuring you’re not caught off guard.
• Support for travelers. Whether you’re renting in the U.S. or considering international car insurance, we can help point you toward solutions that keep you safe.

Conclusion

So does your insurance cover rental cars? If you’re driving domestically, the answer is yes. But once you set foot in a foreign country, your policy may not protect you. In that case, options like overseas rental car insurance coverage and credit card benefits come into play.

Confirming your coverage ahead of time ensures you won’t face expensive surprises or legal issues while driving a rental. At Mercury, we’re here to help you navigate these decisions and provide peace of mind wherever your travels take you. Contact us today for a fast, free quote.