Should I Get Rental Car Insurance?
When you rent a vehicle for a family vacation or a road trip with friends, you’ve probably been asked at the counter whether you’d like to purchase rental car insurance. To answer if you need rental car insurance, you need to understand insurance. Generally speaking, there are four common types of rental car insurance:
- Collision/Damage Waiver (sometimes called CDW, LDW or DW): This isn’t technically insurance coverage. Instead, it is an optional product that waives your financial responsibility if your rental vehicle is damaged while in your care. It covers costs if your rental vehicle is stolen, damaged in an accident, or vandalized. If you don’t have your own auto insurance policy, you may want to consider adding the LDW to your rental car
Here are some general questions and answers to help you make an informed decision if you really need rental car insurance.
If you already have a car insurance policy, it’s likely that coverage extends to rental cars. If you cause an accident in your rental car, most standard policies have liability coverage that helps pay for others’ medical costs and property damage.
However, just like most insurance policies, there are some potential exclusions. Most auto insurers won’t cover you if you rent a car overseas and decline to pay some of the additional fees that rental car companies typically tack onto the collision bill. You’ll need to check your personal car insurance policy coverage types and limits or call your agent ahead of time before you hit the road.
However, just like most insurance policies, there are some potential exclusions. Most auto insurers won’t cover you if you rent a car overseas and decline to pay some of the additional fees that rental car companies typically tack onto the collision bill. You’ll need to check your personal car insurance policy coverage types and limits or call your agent ahead of time before you hit the road.
Several major credit cards provide some form of auto rental insurance coverage that could save you hundreds of dollars on your next auto rental. This is usually called “secondary insurance” because it only kicks in after your primary insurance coverage has been exhausted. However, depending on your card and the state where you rent a car, credit cards can also serve as your primary insurance when renting a car.
Generally speaking, credit cards cover collision damage and theft protection. However, specific rental auto insurance benefits will vary by company as well as the credit card. Also, credit card companies have their own restrictions and exclusions that is why it’s important to check your coverage in advance.
Some credit cards that come with rental car insurance include:
Generally speaking, credit cards cover collision damage and theft protection. However, specific rental auto insurance benefits will vary by company as well as the credit card. Also, credit card companies have their own restrictions and exclusions that is why it’s important to check your coverage in advance.
Some credit cards that come with rental car insurance include:
- Chase Sapphire Preferred and Chase Sapphire Reserve cards
- Chase Hyatt and Chase World of Hyatt cards Capital One Visa Platinum card
- Chase United Explorer and United MileagePlus cards
- Chase Amazon Rewards Visa Signature cards
- American Express Green, American Express Gold, and American Express Platinum cards
- American Express Hilton Honors and Starwood Preferred Guest cards
- Mastercard
- American Express Delta SkyMiles cards
Your homeowner’s insurance or renters’ insurance policy should cover your personal items that are damaged or stolen from a rental vehicle. Just be sure to note the limits of your personal coverage. If you have very valuable items like jewelry, this requires extra rider policy. A smart preventative measure is to remove your things from your vehicle when you’re not in it.
Just like standard auto insurance, the cost of auto rental insurance depends on the vehicle, rental company, and by how much coverage you choose. Here are some average ranges for each component of auto rental insurance:
- Supplemental liability insurance (SLI): $8 to $12 per day.
- Loss damage waiver (LDW) or collision damage waiver (CDW): $20 to $30 per day, if purchased from the rental car company. Some third-party insurers, like Traveler, offer collision insurance for less than $10 per day.
- Personal accident insurance: $3 per day.
- Personal effects coverage: $2 per day
Sometimes it’s worth it to buy rental auto insurance. This depends if you:
- Don’t have insurance because you don’t own a car
- Have insurance that comes with low coverage limits
- Want peace of mind and don’t mind the additional cost
