Picture this: you’re in a rental car- maybe your car’s in the shop, maybe you’re traveling - and boom… an accident. The rental company starts talking about repair bills, “loss of use,” and paperwork you’ve never heard of. Your first thought is usually:
“Wait… doesn’t my car insurance cover this?”
Quick answer (the honest one)
Yes - your car insurance can cover damage to a rental car after an accident, but it depends on what coverage you carry and what happened. Policies vary, and the details matter.
1) When your personal auto policy may cover the rental car
In many cases, your personal auto insurance can extend to a rental car, meaning the rental may be treated like a “temporary substitute” vehicle under your policy. If you carry:
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Liability: may help cover injuries/damage you cause to others (up to your limits)
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Collision: may help pay for damage to the rental car if you crash it
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Comprehensive: may help if the rental is stolen or vandalized
Important: if your policy covers it, your deductible usually still applies. Texas regulators even point out that policies differ—and if you use your policy, you may be responsible for your deductible.
Real-life example
You have collision + comprehensive on your personal policy with a $1,000 deductible.
You accidentally back into a pole with the rental car.
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Your collision may pay for the rental car repairs
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You may still pay the first $1,000
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And there may be other rental-company charges (more on that below)
2) If you only have liability coverage
This is where people get caught off guard.
If your personal auto policy is liability-only, it typically won’t pay for damage to the rental car itself—it’s mainly designed to cover damage/injuries you cause to others (again, up to your policy limits).
So if you’re renting a car and you don’t carry collision/comprehensive on your own vehicle, the rental company may look to you (or the rental company’s waiver, or your credit card benefit) for the rental’s repair bill.
3) If another driver is at fault
If someone else causes the accident, their liability insurance is typically the one that should pay for damages (including damage to the rental car you were driving).
But here’s the frustrating part: rental companies often want payment or a claim started right away, even while fault is being investigated. That’s why it helps to know what “backup” coverage you have.
4) Rental reimbursement vs. rental car damage (easy mix-up)
These sound similar but they’re different:
Rental reimbursement coverage
This is an optional add-on to your policy that helps pay for a rental car when your own car is being repaired after a covered claim.
Damage to the rental car you’re driving
That’s handled (if you have it) by your collision/comprehensive extending to the rental—or by a waiver/credit card benefit.
So: rental reimbursement helps you get a rental.
It does not automatically mean damage to the rental is covered.
5) The rental company’s coverage (LDW/CDW): what it really does
At the counter, you’ll see options like:
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LDW/CDW (Loss Damage Waiver / Collision Damage Waiver)
This can reduce or remove what you owe the rental company for physical damage/theft—depending on the contract.
People often buy it for peace of mind, especially if:
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they’re not sure whether their personal policy extends
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they carry liability-only
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their deductible is high
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they want fewer claims going on their own insurance
6) Credit card rental coverage (helpful, but read the fine print)
Many credit cards offer rental car coverage if you pay with the card and decline the rental company’s waiver.
Two key things to know:
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It can be primary or secondary.
Secondary usually means your personal auto policy pays first, and the card may help with what’s left. -
It often covers damage/theft to the rental car - not liability.
Liability (injuries/damage to others) typically is not what credit card coverage is for.
Bottom line: credit cards can be a great backstop, but they’re not a full replacement for a solid auto policy.
7) The “hidden” rental car charges people don’t expect
Even when insurance pays for repairs, rental companies may charge extra fees such as:
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Loss of use (the income they claim they lose while the car is being repaired)
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Administrative fees
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Sometimes other contract-based charges
This is one reason rental claims feel messier than regular car claims.
A simple rental car coverage checklist (do this before you drive off)
Before you leave the rental lot, take 2 minutes and confirm:
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Do I have collision + comprehensive on my personal policy?
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Am I comfortable paying my deductible if there’s a claim?
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Is anyone else driving—and are they listed on the rental agreement? (Unlisted drivers can create claim issues.)
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Am I relying on a credit card benefit?
If yes: is it primary or secondary, and what does it exclude? -
Do I want LDW/CDW for simplicity? (Especially if you’re unsure.)
What to do immediately after a rental car accident
If you’re in an accident in a rental, do this:
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Make sure everyone is safe and call police if needed
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Take photos: vehicles, damage, the road, license plates, insurance cards
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Call the rental company and follow their reporting process
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Notify your insurance agent (so coverage can be confirmed quickly)
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Save everything: rental agreement, receipts, tow paperwork, emails
FAQs
Does my “full coverage” automatically cover a rental car?
Often, collision/comprehensive may extend - but policies differ and rental situations vary (vacation rental vs. temporary substitute, vehicle type, exclusions, etc.).
If my insurance covers it, do I still pay a deductible?
Usually, yes.
Will my credit card cover everything?
Usually no. Many credit card benefits focus on damage/theft to the rental, and liability is often excluded.
What is “loss of use” and can I be charged for it?
It’s a fee rental companies may charge for time the vehicle can’t be rented while it’s being repaired.
Need a quick “rental car coverage check” before your next trip?
At the Thumann Agency, we’ve been helping to protect Dallas for over 28 years. We’ll look at your current auto policy, explain (in plain English) how it may apply to rentals, and help you decide whether you actually need the extra coverage at the counter.
And because we’re independent and partner with 80+ carriers, we can also shop better options if your current policy leaves gaps.
Want us to review it? Call us and we’ll walk you through it - 972.991.9100
Clarity Check (so you’re never guessing)
Rental coverage can change based on policy language, vehicle type, where you’re renting, who is driving, and the rental contract. This article is general education - not legal advice - and we always recommend confirming the specifics before you rely on coverage.
Last Updated: 17th January, 2026.
Author: Lauren Thumann Director of Marketing.
