Does my car insurance cover a car rental?

When you go to rent a car, you're always faced with the question of whether to buy car rental insurance coverage. Of course, it's nice to have financial protection in case something goes wrong, but is it worth the extra charge?

The truth is, if you already have car insurance, some of the coverage types might extend to a car rental. Below, CNBC Select breaks down when your car insurance can cover a car rental and when it's worth buying the extra insurance for the rental.

• When your car insurance applies to a car rental
• When you might still benefit from rental car insurance
• Other ways to get car rental coverage
• Bottom line

Generally, car insurance follows the car, not the driver. However, there's one situation where this doesn't apply: when you're renting a car for personal use. If you have insurance on your car, it will typically extend to the rental.

If you're considering not purchasing additional insurance for the rental car, first check your existing policy and make sure it includes the following types of coverage:

• Liability: If you're at fault in an accident, this coverage should pay for others' property damage or personal injuries. Liability insurance is required by law so you most likely have this coverage.
• Collision and comprehensive: These two types of coverage pay for the damage to your car. Collision insurance provides coverage if your car has sustained damage in an accident with another vehicle or object. Comprehensive insurance pays in case of other types of damage, as well as theft. If you have a car loan on your vehicle, your lender probably requires that you have these two types of insurance in your policy.
• Personal injury protection (PIP) and medical payments (MedPay): This type of coverage pays for medical expenses for you and your passengers, as well as losses you incur due to the accident, including lost wages, child care, funeral expenses and more. Unlike liability insurance, this coverage can kick in regardless of who's at fault. PIP and MedPay are mandatory in several states.

These types of coverage in your personal car insurance policy can apply to a car rental. You should consider them the bare minimum needed for you to responsibly decline the rental insurance.

Even if your car insurance policy provides all the right types of coverage, it doesn't mean skipping rental car insurance is the best course of action. In certain circumstances, purchasing at least some coverage can be a good idea.

Consider the following scenarios:

• Your policy has low limits and/or high deductibles. This could lead to thousands of dollars in out-of-pocket payments if you get in an accident in a rental car, especially if the vehicle is on the expensive side.
• You're traveling abroad. Usually, U.S. insurers provide coverage anywhere in the U.S. and Canada. If you're renting a car in Mexico or elsewhere abroad, you'll likely be outside the coverage territory.
• You're using the rental car for business purposes. Most of the time, your personal auto insurance won't cover a rental you're using for business.

In these situations, purchasing rental car insurance might be a smart move. Depending on the type of coverage you choose, rental car insurance may offer the following protections:

• Liability coverage
• Personal accident coverage which pays for medical expenses for you and your passengers
• Collision Damage Waiver (CDW) which covers you if the car is damaged or Loss Damage Waiver (LDW) which also provides coverage if the car is stolen
• Personal effects coverage which pays if your personal belongings are stolen for the rental car

Many rewards credit cards provide certain types of coverage for rental cars. To take advantage of your card's benefit, you need to pay the full rental cost with the card, be the primary renter and decline the car rental agency's CDW or LDW. Most cards come with secondary coverage which applies after your personal auto insurance policy. This means you'll have to file a claim with your insurer before submitting one with your card issuer.

Still, some cards offer primary coverage, meaning you can file a claim with your credit card company without going through your personal car insurance first. For example, the Chase Sapphire Preferred® Card comes with primary car rental coverage for domestic and international car rentals. It can pay for any damage in case of a crash or theft, up to the vehicle's actual cash value. The card's annual fee is $95.

The *Capital One Venture X Rewards Credit Card is a premium travel card (with an annual fee of $395) and includes primary car rental coverage with an auto rental collision damage waiver. It covers damage from a crash or theft, up to the car's actual cash value.

Note, however, that credit card rental insurance doesn't include liability coverage. You'll still need to purchase that through the rental company or go through your auto insurer.

Car rental insurance offers financial protection when you're driving a rental vehicle — but you don't always have to purchase it through the rental agency. Check your auto insurance policy to see if it will cover the vehicle you want to rent. Your property insurance may also cover your personal items. Either way, it's best to get in touch with your insurance agent ahead of time and make changes to your policy if it makes sense.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance guide is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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*For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.