Your rental agency may offer you four main rental car insurance options: loss and damage insurance, liability insurance, personal accident insurance and personal effects coverage.
Here are the different types of car rental insurance:
Liability insurance for rental cars
Car rental companies also sell automobile liability insurance. This covers property damage and injuries to other drivers resulting from an accident you cause. If you have personal liability insurance, your own policy will provide that coverage (as long as the trip is not for business). But if you know you’ll be cruising Miami alongside Lamborghinis and Ferraris, $10,000 in Liability coverage probably isn’t going to cut it, so you might want to increase your font limits.
If you are a frequent traveler but don’t own a car, you can also purchase non-owner car insurance to cover you in all driving situations.
Rental car loss and damage insurance
This option releases your responsibility to pay for total loss, accidental damage, environmental damage, theft and vandalism. Collision Damage Waiver (CDW) is similar, but it does not protect against theft. These waivers essentially act as comprehensive and collision policies for the rental. If you already have comprehensive and collision insuranceyou probably don’t need it.
However, a damage waiver will not require you to pay a deductible, which is another thing to consider.
If you cause damage to your vehicle and it is sent to the repair shop, the car rental company may charge you a fee for each day the car is out of service. Damage Waiver will protect you from these costs, just like most full-coverage insurance policies. However, some won’t, so it’s a good idea to review your own policy before renting a car.
Personal accident car rental insurance
This type of coverage pays medical expenses for you and your passengers, regardless of who is at fault in an accident. It’s similar to the medical payments (MedPay) and Personal Injury Protection (PIP) you would get on your standard vehicle.
If you already have one of these insurance products, you do not need personal accident insurance. Also, if your personal auto insurance doesn’t cover your medical expenses, your health insurance may cover them after you pay your health deductible. Personal accident insurance does not require a deductible.
Rental car personal effects coverage
This additional coverage option protects your personal items such as electronic devices, luggage and clothing. If you have a home or renter’s insurance policy, it will also cover personal items stolen from a rental car.
Other Types of Car Rental Insurance
In addition to the car rental company’s options, you may be covered by your credit card company or travel insurance.
Credit card rental car insurance
Premium credit cards often include primary coverage for rental cars. Primary coverage comes with high limits and can handle the entire claim, meaning your own insurance company won’t know about the claim (and won’t raise your rates).
On the other hand, standard maps often include secondary coverage. This comes with lower limits and requires you to file a claim with your own insurance company first. In either case, you must book the rental with the credit card to receive coverage.
Car rental travel insurance
Travel insurance programs can usually cover collisions and loss of use for less than the car rental company.
International car rental insurance
If you are traveling to Mexico or Canada, your personal insurance may or may not cover rental cars in those locations. It’s a good idea to speak to your agent to find out before you go. Typically, standard auto insurance companies in the United States do not cover overseas rentals, so it may be a good idea to purchase rental car insurance in this situation.