Rental Car Insurance

Purchase rental car insurance that will protect from financial liability if you are involved in an accident while driving a rental car.

It differs from rental car reimbursement, which pays you to rent a car while your car is being repaired.

Rental car agencies offer many forms of coverage some which are as follows:

  • Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW) offers comprehensive-like protection and covers any number of potential calamities that can befall a rental car including and up to replacement costs. Depending on the policy, an LDW may cover other expenses such as towing as well.
  • Liability Coverage is very similar to what you would carry for your personal vehicle. The rental car agency will automatically cover you with that state's liability minimums.
  • Personal Accident Insurance (PAI) essentially covers medical payments and other associated costs and is similar to the medical insurance you find with many personal auto insurance policies.
  • Personal Effects Coverage (PEC) covers the cost of replacing any items stolen from a rental car.
If you have a personal insurance policy, then most of what a rental car agency offers is probably already covered. Of course, you should check your policy carefully before making this assumption. In any event, the only thing that won't be covered for sure are personal effects, however you may be covered under your homeowner's policy (if you have one). Make sure to check beforehand to see if your policy extends to rental vehicles.

Finally, many times credit card companies will offer free rental insurance if you use their card to rent a car. It typically covers only collision and theft coverage so make sure you check the policy specifics ahead of time.

Rental car insurance costs will vary from agency to agency and can cost renters anywhere from $5 to $20 per day, depending on what kind and how much coverage you elect to carry.