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QDo I Need Rental Car Insurance?

AWith a loss damage waiver, a car rental company won’t pursue you for repairs and losses in the event of an accident. However, this kind of rental car insurance might be unnecessary if you have certain coverages on your regular insurance policies.

car accident

Insurance is an important consideration when renting a car. In every case, you will need rental car insurance before getting behind the wheel of your vehicle.

The first thing worth noting is that you might be covered for rental insurance by your own personal car insurance or credit card provider, but you can buy additional car rental insurance on top, if you need it. Contact your own insurance company to see if they can extend your existing coverage to include rental car insurance. Many customers will already be covered by their own auto insurance or the insurance provided by their credit card company, but they may not be aware of it. Being in the know about which coverage you really need can save you several dollars each day of your rental period, so taking the time to check this can save you from being out of pocket for something you don’t really need.

signing rental paperwork

Car Rental Insurance: Which is Right for Me?

So, how do you know which car rental insurance to take out?

If you’re not at all covered by any form of insurance for your rental car, or if that provided by your own insurance company is not sufficient, you will need to purchase one. Your rental car company will offer you the option of adding insurance when you make your reservation. Have a read of the auto insurance policy on the rental company’s website, to ensure you are purchasing adequate coverage. Two of the common car insurance packages you’ll come across are basic and premium. There is no standard meaning for these types of car insurance policies, and they can mean different things to different brokers, so be sure to check the details.

Whichever way you decide to obtain your auto insurance, be sure to check what you’re covered for. You should be asking the following questions:

  • Does the policy include collision coverage?
  • Which parts of the rental car does the collision damage waiver (CDW) cover?
  • To what maximum amount am I insured?
  • Does the rental come with theft protection and third-party liability insurance?

Rental Car Insurance Types

There are many car insurance options out there for non-owners and new car rental policyholders. But don’t be put off by the many choices. If you aren’t already covered by your own personal insurance, all you have to do is decide which one meets your insurance requirements. We have outlined the most common types of insurance that your rental car company may offer you when you opt to buy cover with them:

Types of InsuranceCoverage Details
  • Supplemental (Third-Party) Liability Insurance

Covers damage to other people’s property and cars, and the medical costs that might result from an accident that you are responsible for.

  • Partial Damage Waiver (PDW)

Pays for costs up to a certain amount in the event of loss or damage. The customer is then held responsible for costs exceeding this amount.

  • Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW)

Helps pay to repair or replace your car if it’s damaged in an accident, stolen, or damaged due to an attempted theft.

  • Emergency Sickness Protection

Covers all members of the travel party in the event of illness during the rental period.

  • Roadside Assistance Protection

Protects you from service and repair costs in the event that you get locked out of the car, run out of petrol, get a flat tire, or need a jump start.

Rental Car Insurance Tips

It’s also worthwhile to think about the deductible you will need to pay in the event of a claim. As with the type of insurance you opt for, you have some choice in the amount of money you have to pay toward repairs before your insurance covers the rest:

  • Insurance coverage with a deductible means that part of the sum due for repairs is paid by the customer and the insurance covers the remainder
  • Where redemption of the deductible is possible, the customer pays for the costs first and is reimbursed by the broker after making a claim
  • With a zero deductible policy, the customer does not pay any upfront cost for repairs

It’s also important to know what your rental car insurance does not cover. Just like regular car insurance, your rental insurance will not cover parking or speeding tickets, roadside safety net insurance, or charges incurred on toll roads. Be sure to have a close read of your rental car insurance policy and check with your issuer if you have any doubts about what is or isn’t covered.

It’s also worth noting that if you are already insured by your credit card or your personal auto insurance, you may still be required to buy an additional insurance depending on the location in which you are renting. For example, in Mexico, you will need to purchase liability insurance if it’s not included in the rental price since coverage from U.S. auto policies or credit card insurance is not accepted. The same applies for renters in Cuba. If you’re renting a car in Ireland, unlimited third-party liability insurance is mandatory, and most U.S.-issued credit cards do not provide coverage for car rentals in this country. You may also need additional rental coverage if you are crossing borders in your rented vehicle.

The information provided in this guide was accurate at the time of publication but is subject to change at any time. Please check your car rental company’s terms for the latest information.