Insurance for Rented Car

Renting a car for your trip is a convenient and flexible option, whether you are travelling for business or pleasure. However, renting a car also comes with a risk, as accidents and damages can happen anytime during your rental period. That is why obtaining insurance for your rented car is crucial for your peace of mind and financial protection.

What is Rental Car Insurance?

Rental car insurance is a policy that provides coverage to the driver and the rented car in the event of an accident, theft, or damage. It varies from the insurance that you purchase for your own car as it is designed to protect the rented car during the rental period only. The coverage includes collision damage waiver, liability, and personal accident insurance.

Collision Damage Waiver

Collision damage waiver (CDW) is also known as Loss Damage Waiver (LDW). It covers damage to the rented vehicle and is designed to protect you from paying the full cost of repairs or replacement. CDW is not an insurance policy but a waiver that eliminates your responsibility to pay for damages to the rental car.

You are still responsible for the deductible amount stated in the rental agreement. The deductible amount varies depending on the rental company and the type of car you rent. CDW does not cover damages caused by reckless driving, driving under the influence of drugs or alcohol, or driving off-road.

Liability Insurance

Liability insurance protects you from any legal responsibility if you are involved in an accident that damages other people’s property or causes injury to others. It also covers the cost of legal fees if you are sued for damages. Liability insurance is mandatory in most states in the US, but the required coverage amount varies.

When you rent a car, the rental company provides you with the minimum required liability coverage. However, you can also purchase additional coverage to increase your protection. The coverage amount can range from $100,000 to $1 million or more depending on your needs.

Personal Accident Insurance

Personal accident insurance provides coverage for medical expenses and accidental death or dismemberment resulting from a car accident. It is an optional coverage that you can purchase along with CDW and liability insurance. Personal accident insurance can provide coverage for you and your passengers.

Types of Rental Car Insurance

When renting a car, you may be offered different types of rental car insurance coverage. These include:

Loss Damage Waiver (LDW)

Loss Damage Waiver (LDW) is another term for Collision Damage Waiver (CDW). It is a waiver that covers damage to the rental car. LDW eliminates your responsibility to pay for damages to the rental car but does not cover damages caused by reckless driving, driving under the influence of drugs or alcohol or driving off-road.

Supplemental Liability Insurance (SLI)

Supplemental Liability Insurance (SLI) provides additional liability coverage to protect you from lawsuits or claims made by a third party if you are involved in an accident that damages other people’s property or causes injury to others. It covers the cost of legal fees if you are sued for damages.

Personal Accident Insurance (PAI)

Personal Accident Insurance (PAI) provides coverage for medical expenses and accidental death or dismemberment resulting from a car accident. It is an optional coverage that you can purchase along with CDW and liability insurance.

Where to Purchase Rental Car Insurance

You can purchase rental car insurance from different sources, including:

Rental Car Companies

Rental car companies offer rental car insurance as an optional coverage that you can purchase when you rent a car. The coverage amount can vary depending on the rental company and the type of car you rent.

Independent Insurance Providers

You can also purchase rental car insurance from independent insurance providers. These providers offer different types of rental car insurance coverage, including CDW, SLI, and PAI. They can also provide coverage for your personal car insurance deductible if you use your personal car insurance to cover the rental car.

Credit Card Companies

Some credit card companies offer rental car insurance as a benefit to their cardholders. The coverage amount can vary depending on the type of credit card you have. However, you need to use the credit card to pay for the rental car, and you need to decline the rental car company’s insurance to be eligible for the credit card benefits.

Frequently Asked Questions

What is a rental car insurance policy?

A rental car insurance policy is a coverage that protects the rented car and the driver in the event of theft, accident, or damage. It includes collision damage waiver, liability, and personal accident insurance.

Do I need rental car insurance?

Rental car insurance is not mandatory, but it is recommended to protect you from financial losses if an accident or damage occurs during your rental period.

What does collision damage waiver cover?

Collision damage waiver (CDW) covers damage to the rented car during the rental period. It eliminates your responsibility to pay for damages to the rented car but does not cover damages caused by reckless driving, driving under the influence of drugs or alcohol or driving off-road.

What does liability insurance cover?

Liability insurance covers you from legal responsibility if you are involved in an accident that damages other people’s property or causes injury to others. It also covers the cost of legal fees if you are sued for damages.

What does personal accident insurance cover?

Personal accident insurance covers medical expenses and accidental death or dismemberment resulting from a car accident. It is an optional coverage that you can purchase along with CDW and liability insurance.

Where can I purchase rental car insurance?

You can purchase rental car insurance from rental car companies, independent insurance providers, and credit card companies.