Whether you’re going on a road trip, visiting family, or just need a car for a few days, renting a car can be a great option. However, it’s important to make sure you have the right car insurance coverage before hitting the road. In this article, we’ll explain what rent car insurance is, what it covers and how to decide if you need it.
What is Rent Car Insurance?
Rent car insurance is a type of coverage that protects you in case of damage or theft of a rental car. When you rent a car, the rental company typically offers you some form of insurance. Depending on the type of coverage you choose, rent car insurance can cover:
Type of Coverage |
What it Covers |
|---|---|
Collision Damage Waiver (CDW) |
Damage to the rental car if you’re in an accident or the car is stolen |
Theft Protection |
Covers the cost of the rental car if it’s stolen |
Supplemental Liability Protection |
Covers damage you may cause to others’ property or injuries you may cause in an accident |
Personal Accident Insurance |
Covers medical expenses in case of an accident |
It’s important to note that rent car insurance is optional, but it can provide peace of mind and protect you from unexpected costs.
Collision Damage Waiver (CDW)
CDW is the most common type of rent car insurance. It’s designed to cover damage to the rental car if you’re in an accident or the car is stolen while in your possession. CDW typically doesn’t cover damage to other vehicles, property or injuries to people.
When you purchase CDW, the rental company will usually require you to pay a deductible, which is the amount you’ll need to pay out of pocket before the insurance coverage kicks in. The deductible amount can vary, but it’s usually around $500 to $1,500.
It’s important to read the fine print of your CDW coverage to understand what’s included and what’s not. For example, some policies may exclude damage caused by reckless driving or under the influence of drugs or alcohol.
Theft Protection
Theft protection or loss damage waiver (LDW) covers the cost of the rental car if it’s stolen or damaged due to theft, vandalism or natural disasters. If you decline LDW coverage and the rental car is stolen, you’ll be responsible for paying the full value of the car, which can be thousands of dollars.
Like CDW, LDW usually comes with a deductible that you’ll need to pay out of pocket before the insurance coverage kicks in. Again, it’s important to read the fine print of your policy to understand what’s included and what’s not.
Supplemental Liability Protection
Supplemental liability protection (SLP) provides additional coverage for damage you may cause to other people’s property or injuries you may cause in an accident. SLP is usually sold separately from CDW and LDW, and it’s often a good idea to purchase it if you don’t have adequate liability coverage through your own car insurance policy.
Like CDW and LDW, SLP usually comes with a deductible that you’ll need to pay out of pocket before the insurance coverage kicks in. The amount of coverage provided by SLP can vary, but it’s usually around $1 million.
Personal Accident Insurance
Personal accident insurance (PAI) covers medical expenses in case of an accident. It’s not a substitute for health insurance, but it can provide additional coverage if you’re injured while driving a rental car.
PAI is usually sold separately from CDW, LDW and SLP, and it’s often included in some travel insurance policies. It’s important to read the fine print of your PAI policy to understand what’s covered and what’s not.
Do You Need Rent Car Insurance?
Whether or not you need rent car insurance depends on several factors, including:
Your Own Car Insurance Policy
If you have your own car insurance policy, it’s important to check with your insurer to see if it covers rental cars. Some policies may provide coverage for rental cars, but the coverage limits and deductibles may vary.
If your own policy doesn’t provide adequate coverage for rental cars, it may be a good idea to purchase rent car insurance to avoid unexpected costs.
Your Credit Card Benefits
Many credit cards offer rental car insurance as a benefit to cardholders. The coverage provided by credit cards can vary, but it typically includes CDW and sometimes LDW.
However, to be eligible for credit card rental car insurance benefits, you usually need to use the card to pay for the rental car and decline the insurance offered by the rental company. It’s important to read the terms and conditions of your credit card benefits to understand what’s covered and what’s not.
The Rental Car Company’s Requirements
The rental car company may require you to purchase rent car insurance as a condition of renting the car. This is common in some countries and for certain types of vehicles.
Even if rent car insurance is not required, it may be a good idea to purchase it for peace of mind and protection from unexpected costs.
FAQs
What is the difference between CDW and LDW?
CDW covers damage to the rental car in case of an accident or theft, while LDW covers the cost of the rental car if it’s stolen or damaged due to theft, vandalism or natural disasters.
Do I need to purchase rent car insurance if I have my own car insurance?
It depends on your policy. If your own policy provides adequate coverage for rental cars, you may not need to purchase rent car insurance. However, it’s important to check with your insurer to confirm your coverage limits and deductibles.
What if I have an accident while driving a rental car?
If you have an accident while driving a rental car, you should follow the same steps as you would if you were driving your own car. This includes exchanging information with the other driver, taking pictures of the damage and contacting the rental company and your insurance company.
What if I decline rent car insurance and the rental car is stolen?
If you decline rent car insurance and the rental car is stolen, you’ll be responsible for paying the full value of the car. This can be thousands of dollars, so it’s important to consider the risks before declining rent car insurance.
Can I use my credit card rental car insurance in another country?
It depends on your credit card benefits. Some credit cards provide rental car insurance coverage worldwide, while others only provide coverage in certain countries. It’s important to read the terms and conditions of your credit card benefits to understand what’s covered and what’s not.
What if I don’t have car insurance or a credit card that provides rental car insurance?
If you don’t have car insurance or a credit card that provides rental car insurance, it’s important to purchase rent car insurance to protect yourself from unexpected costs in case of an accident or theft.
Conclusion
Rent car insurance can provide peace of mind and protect you from unexpected costs when renting a car. The type of coverage you need depends on several factors, including your own car insurance policy, credit card benefits and the rental car company’s requirements. By understanding the different types of rent car insurance and considering your own needs, you can make an informed decision and enjoy your rental car with peace of mind.