Thinking about renting a car for your next getaway? Much like insurance, rental car contracts can seem complicated, if you don’t know what to look for. Understanding what you need and what you don’t will help you save on your rental—and use that extra savings for vacation fun.


First, let’s take a look at the basics of a rental car contract.

Age: You must be 25 or older to rent a car in the U.S. You can still rent a car if you are aged 21-24, but you will pay an extra fee. Similarly, you may need to pay a surcharge if you are age 70 and above. 

Additional drivers: You may pay a fee for each driver beyond the main driver. However, rental car companies often will let spouses drive for no additional fee.

Classification of car: The daily or weekly rate depends on the type of car that you choose. Choices range from economy, the least expensive, to luxury, and more. Here’s a quick rundown of the basic sizes:

    • Economy generally describes a small sedan with 2-4 doors and seating for 4.
    • Compact is a slightly larger sedan with 4 doors and seating for up to 5.
    • Intermediate/mid-size/standard are 4-door sedans that are more spacious than compacts. They seat up to 5.
    • Full-size/premium cars seat 5 comfortably and have ample room for luggage.

You can also rent luxury cars, convertibles, SUVs, mini-vans, vans, and trucks. Keep in mind that the rate quoted for the car you choose is only the base rate. The actual price you pay may be more because it will include fees and surcharges.

Fees and Surcharges: You might expect to pay state and local taxes. But did you know you also may pay a surcharge to pick up/drop off your car at the airport? There’s a charge if you don’t return the car with the same level of gas. There also are charges for insurance, to protect against damage to the vehicle.

Insurance: Before you purchase rental car insurance, make sure your auto policy doesn’t already cover rental cars. Many policies do. If you’re renting a car out of the country, double-check that your auto policy covers you. For example, when traveling in Mexico, you will need a special Mexico policy.

    • Collision Damage or Loss Damage Waiver – Optional in many states, this type of coverage pays for the rental car if it is damaged or stolen. There usually is a deductible, for which you’re responsible. If your auto policy covers collision damage, make sure that it also covers “loss of use.” For a rental company, getting a car repaired in the shop means it loses the income it could be getting from renting the car. The rental company can charge you the daily rental rate for each day the vehicle is out of service. 
    • Personal Accident Insurance – This optional policy covers you, the driver, in the event of an accident, including ambulance transportation and medical bills.
    • Supplemental/Additional Liability Insurance – This optional policy covers the other driver and passengers whom you may injure in an accident. It also covers any property damage. You likely have liability on your own auto policy. Check to make sure the liability limit is enough. You can purchase supplemental liability insurance with the rental car company or get an umbrella policy from your current insurer.
    • Personal Effects Coverage – This optional policy covers your possessions if they are damaged, lost, or stolen, something your homeowner or renter’s policy may already cover.

Mileage: Some rental contracts come with unlimited mileage. Others require that you pay for mileage beyond a certain daily limit. For example, if the daily limit is 150 miles, and you drive 160 miles, you will owe 10 additional miles at the rate charged by the company.

Now let’s see how you can save some money.

You have a lot of choices in renting a car. That gives you some control over how much you spend. Here are some ways you can keep the bill more reasonable.

1. Choose a slightly smaller vehicle. Not only will this save on the daily rate, but the car will also most likely get better fuel economy and require less gas to fill it up.

2. Book your rental car through your airline. Airlines have arrangements for discounts with rental car companies. That’s why bundling rental cars with flights and hotels can save money.

3. Book through your credit card. Credit cards can include a collision damage waiver. Just make sure you also are covered via your auto policy, as credit cards are usually tapped after your auto policy.

4. Take advantage of membership and group discounts. You may qualify for a discount if you are a member of AAA. There also are sometimes alumni or university discounts. If you rent frequently, you can get discounts via a rental car loyalty program.

5. Shop around. You might find a locally-owned rental company with a better rate. You also can find good rates on travel websites such as Kayak. If you’re using a lesser-known company, do your research with the Better Business Bureau to make sure they’re legitimate. 

6. Check alternate rental locations. It may be cheaper to pick up in town than at the airport.

7. Check your own auto policy coverages so you choose only the coverages you need. Check with your insurer on other potential savings. For example, California Casualty will waive your physical damage deductible if you rent a car while on vacation.

8. Return the car on time. Be aware of the 24-hour time clock. You can be charged for extra hours or even an extra day depending on how late you are.

Renting a car can be stressful, but it doesn’t have to be. For more questions on rental car insurance or ways you can save on your own insurance policy, call a California Casualty agent today at 1.866.704.8614 or visit our website



This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or

California Casualty

Pin It on Pinterest