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Traveling can result in unexpected expenses. With State Farm rental car insurance, you can ensure the repairs required to your rental after an accident or other covered event isn’t one of them. We at the MarketWatch Guides Team go over how rental car insurance works, what it covers, what it doesn’t, how it differs from rental car reimbursement and the other best car insurance companies offering this coverage.
- State Farm rental car insurance includes liability, collision, comprehensive, medical payments and emergency roadside assistance.
- State Farm offers travel expenses coverage up to $500 for a covered loss that occurred more than 50 miles from home.
- Your full-coverage auto insurance, major credit cards and health insurance can provide the coverages you need in lieu of rental car insurance.
- State Farm also offers rental car reimbursement, which doesn’t insure a rental car but reimburses you for the cost of actually renting a car while your personal car is undergoing repairs from a covered accident.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
Does State Farm Car Insurance Cover Rental Cars?
Yes, State Farm car insurance covers rental cars. Specifically, if you have State Farm auto insurance with full coverage, it extends to covering you when renting a car for personal uses. However, if your rental car is more expensive than the car you insure, you should consider additional protection.
If you rent a car for business purposes and don’t have a commercial policy with State Farm, then you’ll need rental car insurance. Also, State Farm offers a separate policy specifically for renting cars. So, if you don’t have a car and you don’t plan to use a credit card when renting a vehicle, this coverage can come in handy.
What Does State Farm Rental Coverage Include?
State Farm rental coverage works similarly to other regular car insurance from other companies in that it offers liability coverage. It protects you financially if you’re involved in an accident with another driver by covering their vehicle repair and replacement costs and medical bills up to a specific amount. You can ask your State Farm agent for recommendations for more coverage if you plan to rent a luxury vehicle or if you’re in an area populated with higher-priced cars.
There’s also collision and comprehensive coverage. Collision coverage provides financial protection for repairs or the replacement of your rental car after an accident. Meanwhile, collision insurance provides protection for when your rental car gets stolen or suffers damage from flood, hail or fire. State Farm offers a repayment of the deductible expense to cover up to $500 if you have a covered-loss event when renting a vehicle.
State Farm offers extra policies such as emergency roadside assistance, medical payments coverage (MedPay) and or personal injury protection (PIP). You can work with your local agent to tailor your coverage options to your exact needs.
Read more: Does State Farm have travel insurance?
Rental Car Coverage vs. Rental Car Reimbursement
State Farm’s rental car insurance and rental car reimbursement are two different types of coverage. Rental car insurance covers you when you’re renting a car for travel or personal use. State Farm’s rental car reimbursement coverage add-on reimburses you for the cost of actually renting a car when your vehicle is in the shop for covered repairs.
Travel expenses are another perk similar to rental car reimbursement through State Farm. If you or another covered driver is more than 50 miles from home, and your vehicle gets damages that your comprehensive or collision won’t cover, State Farm will provide up to $500 to cover lodging, meals and transportation to your home or your intended destination.
What Is Rental Car Insurance?
Rental car insurance is an auto insurance policy meant to protect those renting cars who don’t have a full-coverage policy and aren’t using a credit card to rent the car. It’s a separate insurance policy sold by your insurance carrier or rental car company.
What Does Rental Car Insurance Cover?
Liability insurance comes with rental car coverage for the repair and replacement costs of a vehicle involved in an accident with you and any medical expenses the other driver has. You’ll also have access to add any of these other features to your policy:
Loss/Collision Liability Waiver
Rental car insurance also has a loss/collision liability waiver. This waiver releases you from any financial liability if your rental car gets damaged or someone steals it. And if the rental vehicle has to go into the shop for repairs, you won’t have to pay a deductible on it like you would with traditional insurance policies.
Collision Damage Waiver
Some companies also offer a collision damage waiver (CDW). This covers any repairs or replacement of a vehicle damaged while you rent it. CDW may also cover theft in some cases.
Personal Accident Insurance
Personal accident insurance pays for any medical bills you or your passengers have — regardless of who caused the accident. It works similarly to MedPay and PIP. If you don’t have either but you do have health insurance, that’ll cover you after you satisfy any copay or deductible requirements.
Personal Effects Coverage
Lastly, there’s personal effects coverage. If you leave your rental unlocked and your laptop or clothes are stolen, it provides coverage to replace these items. That said, if you already have a homeowners or renters insurance policy with State Farm, that could also provide reimbursement from theft.
What Doesn’t Rental Car Insurance Cover?
There are several instances where you might experience gaps in coverage limits with rental car insurance. One of which is using your credit card to rent a vehicle. Many major credit card providers will cover liability, collision and comprehensive when you rent a car, SUV or crossover. That said, if you plan to rent a luxury vehicle, a motorcycle, truck or mobile home, your credit card issuer might not cover these rentals.
State Farm’s rental car insurance won’t cover some expenses. Costs like gas, tolls and security deposits imposed by the rental car company usually aren’t covered by rental car insurance. However, they may be covered by rental car reimbursement coverage, which pays you for your expenses towards getting a rental car while yours is in the shop.
Also, you’ll want to check with your insurance provider to determine your coverage amounts before traveling. If you’re planning on renting a vehicle with a value that far exceeds your coverage amounts, you’ll want to consider additional coverage to keep you protected in the event of a crash
Do You Need Rental Car Coverage?
It’s good to know when you might need rental car coverage. There are specific instances where it makes sense to have this auto insurance policy:
- Limited insurance: Some car insurance coverage includes higher deductibles and won’t cover rental cars. You should contact your insurance agent to determine if you have adequate coverage for a rental. It’ll also apply if you have liability-only coverage yet you want collision and comprehensive coverage for your rental.
- You don’t have insurance: If you don’t have a vehicle and don’t want a non-owners car insurance policy, having rental car insurance from State Farm is an affordable way to remain protected when traveling.
- Going overseas: Some countries have local laws that prohibit you from leaving the country until you pay the damage incurred on your rental vehicle. By having rental car insurance, you won’t have to worry, because it’ll cover the costs to repair or replace the vehicle.
- You’re traveling for work: If you rent a vehicle for work purposes but don’t have a commercial auto insurance policy, you’ll need to buy rental car insurance unless your company or your personal credit card covers you.
- The rental’s value is high: Should you rent a vehicle with a value that far exceeds your coverage limits, you’ll want to add more protection.
When You Don’t Need Rental Car Coverage
Meanwhile, there are other instances where you won’t need rental car insurance. Here’s some of them:
- You have full-coverage insurance: If you have full coverage, your comprehensive and collision and any medical coverages extend to rental cars.
- You’re renting a vehicle with a major credit card: Many credit card companies offer rental car insurance as part of their offerings. You’ll want to check first with your issuer if it has this coverage and what the limits are before using it.
- You have travel insurance: Travel insurance covers the costs to repair or replace your rental vehicle. Often, it’ll be cheaper than what your car rental company charges.
- You have other insurance policies: Homeowners and renters insurance can cover personal effects stolen from your rental, whereas health insurance can cover your medical bills once you fulfill your copays or deductibles. Combined with a full-coverage auto policy, you won’t need any of the additional protections offered by rental car companies.
State Farm Rental Car Insurance: The Bottom Line
State Farm’s rental car insurance policy works best if you’re traveling for work, don’t have auto insurance or if you want more features like MedPay. State Farm offers the same kind of protection you would find with full coverage on a personal car, such as collision, liability and comprehensive.
However, there are circumstances where you wouldn’t need it. If you have a full-coverage auto policy or plan to use your credit card to pay for the rental, chances are you already have the financial protection you need. It’s ideal to check with your car insurance or credit card provider first to make sure you’re covered before you hit the road.
Other Companies That Offer Rental Car Insurance
State Farm is a great choice for rental car insurance, especially if you already have a policy through it. But you may be looking for rental car coverage through other companies. We recommend looking into USAA and Erie Insurance to start.
The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
USAA: Best for Military
USAA’s full-coverage policy covers you if you want to rent a vehicle in the United States. And if you use the USAA credit card to pay for your rental, you’ll have protection for your rental from physical damage and theft. It even covers loss-of-use and provides protection for up to 31 days internationally.
However, it’s important to note USAA is only available to military members, veterans and their families. This is why it received the Best for Military award from our team.
Read more: USAA Insurance Review
Erie Insurance: Affordable for Basic Coverage
Erie Insurance includes basic car renter insurance if you have a policy with collision and comprehensive. If you don’t have full coverage, Erie makes it easy to add it. Simply contact an agent to add the policy before your trip.
Erie Insurance also offers unique coverages as part of its auto insurance. It includes pet coverage, auto glass repair, personal item coverage and locksmith service. You can also earn up to a 20% discount by bundling multiple policies with Erie.
Read more: Erie Insurance Review
State Farm Rental Car Insurance: FAQ
Below are frequently asked questions about State Farm rental car insurance:
Many of the top carriers like State Farm, USAA and Erie Insurance offer rental car insurance, or if you have comprehensive and collision coverage through them, your rental will also be covered. You can check with your existing provider to see which policies it has available.
Rental car insurance works similarly to traditional insurance in that it provides you with financial protection in the event you’re involved in an accident while traveling. It can cover the repair or replacement costs of your rental, damage done to other vehicles involved and medical expenses.
What’s included in your State Farm rental car coverage has a lot to do with what kind of insurance policies you already have. If you have a full-coverage auto policy with State Farm, you already have rental car coverage. Likewise, if you have homeowners or renters through State Farm, your personal property will also be covered in the rental.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Industry standing (20% of total score): Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Customer experience (15% of total score): This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
