If you’re renting a car, you might be wondering if you need insurance. The answer is yes. While rental cars usually come with some form of insurance, it’s often not enough to cover you in case of an accident. In this article, we’ll go over everything you need to know about car insurance for renters, including what it covers, how much it costs, and where to buy it.
What is Car Rental Insurance?
Car rental insurance is a type of coverage that protects you in case of an accident while driving a rental car. Most rental cars come with some form of insurance included in the rental price, but it’s usually not enough to cover all of the costs associated with an accident. That’s why many renters choose to buy additional insurance when renting a car.
There are two main types of rental car insurance:
Type of Insurance |
What it Covers |
|---|---|
Collision Damage Waiver (CDW) |
Covers damage to the rental car in case of an accident, theft, or vandalism |
Supplemental Liability Insurance (SLI) |
Covers damage to other people’s property or injuries to other people in case of an accident |
Collision Damage Waiver (CDW)
A Collision Damage Waiver (CDW) is sometimes referred to as Loss Damage Waiver (LDW) and covers damage to the rental car in case of an accident, theft, or vandalism. CDW is not technically insurance, but rather a waiver that the rental car company offers to waive your responsibility to pay for damage to the vehicle.
If you purchase CDW, you will not be responsible for paying for damage to the rental car, but you may still be responsible for any administrative or other fees associated with the damage. CDW typically does not cover damage to personal belongings or injuries to other people.
Supplemental Liability Insurance (SLI)
Supplemental Liability Insurance (SLI) covers damage to other people’s property or injuries to other people in case of an accident. SLI is often required by law in some states or countries, and it is always a good idea to purchase SLI if you do not have adequate liability coverage through your auto insurance policy.
If you are at fault in an accident, SLI will cover the costs of damage to other people’s property and injuries to other people up to the limits of the policy. SLI does not cover damage to the rental car or your personal belongings.
Do You Need Car Rental Insurance?
If you have auto insurance, you may already have coverage for rental cars. Check with your insurance company to see what is covered under your policy, as many policies provide coverage for rental cars as long as you have liability, collision, and comprehensive coverage on your personal vehicle.
If your auto insurance policy does not provide coverage for rental cars, or if you do not have auto insurance, you should consider purchasing CDW and SLI from the rental car company to ensure that you are protected in case of an accident.
How Much Does Car Rental Insurance Cost?
The cost of car rental insurance varies depending on several factors, including the type of coverage you need, the rental car company, and the length of the rental period. Plan on spending anywhere from $10 to $30 per day for CDW and SLI coverage.
If you’re renting a car for a longer period of time, you may be able to save money by purchasing a standalone car rental insurance policy rather than paying for additional insurance through the rental car company.
Where to Buy Car Rental Insurance
You have several options for purchasing car rental insurance:
Through the Rental Car Company
The most convenient way to purchase car rental insurance is through the rental car company. Most rental car companies offer CDW and SLI coverage at the time of rental. The coverage is added to your rental agreement and you pay for it along with your rental fees.
Through Your Auto Insurance Company
If you have auto insurance, check with your insurance company to see if they offer coverage for rental cars. Some policies provide coverage for rental cars as long as you have liability, collision, and comprehensive coverage on your personal vehicle.
Through a Standalone Insurance Policy
You can also purchase a standalone car rental insurance policy from an insurance company. This type of policy provides coverage for rental cars and often includes higher limits of liability coverage than what is offered through rental car companies.
FAQ
What happens if I don’t buy car rental insurance?
If you don’t have insurance and get into an accident, you will be responsible for paying for all damages and injuries out of pocket. This can be very expensive and can even lead to bankruptcy in some cases. It’s always better to be safe than sorry and purchase rental car insurance.
Does my credit card offer rental car insurance?
Many credit cards offer rental car insurance as a benefit for cardholders. However, the coverage provided by credit cards can vary widely and may not provide enough coverage to fully protect you in case of an accident. Be sure to check with your credit card company to see what type of coverage they offer.
What happens if I damage the rental car?
If you damage the rental car, you will be responsible for paying for the damage. If you have CDW coverage, the rental car company will waive your responsibility for paying for the damage up to the limits of the policy. If you do not have CDW coverage, you will be responsible for paying for the damage out of pocket.
What does CDW cover?
CDW covers damage to the rental car in case of an accident, theft, or vandalism. CDW does not cover damage to personal belongings or injuries to other people.
What does SLI cover?
SLI covers damage to other people’s property or injuries to other people in case of an accident. SLI does not cover damage to the rental car or your personal belongings.
Can I purchase car rental insurance after I’ve already rented the car?
Yes, you can usually purchase car rental insurance after you’ve already rented the car. However, it’s always a good idea to purchase insurance at the time of rental to ensure that you are fully protected in case of an accident.
Conclusion
Car rental insurance is an important consideration if you’re planning to rent a car. While most rental cars come with some form of insurance included in the rental price, it’s often not enough to fully protect you in case of an accident. Make sure you understand what is covered under your auto insurance policy and consider purchasing additional coverage through the rental car company or a standalone insurance policy to ensure that you are fully protected in case of an accident.