The simplest way to insure a rental car is to first check your existing personal auto insurance policy and credit card benefits, as they often provide adequate coverage, making the rental company's expensive insurance optional. If you lack these, purchasing the Loss Damage Waiver (LDW) from the rental company is the most straightforward way to protect yourself from financial liability for damage to the car.
Understanding Your Existing Coverage
Before renting, contact your auto insurance agent. Most standard policies extend liability coverage (for damage you cause to others) and sometimes comprehensive and collision coverage (for damage to the rental car) to rental vehicles. However, confirm any deductibles and coverage limits. Furthermore, many premium credit cards (e.g., Visa Signature, Mastercard World Elite) offer primary or secondary CDW/LDW coverage when you use that card to pay for the rental and decline the rental company's insurance. This can be a powerful, cost-free benefit.
Rental Company Insurance Options
Rental counters offer several products. The most crucial is the Loss Damage Waiver (LDW), also called a Collision Damage Waiver (CDW). This isn't traditional insurance; it's a waiver that relieves you of financial responsibility if the rental car is damaged or stolen. Other offerings include Liability Insurance Supplement (extends your liability limits), Personal Accident Insurance (covers medical costs for you/passengers), and Personal Effects Coverage (for stolen luggage). For most short-term renters, LDW is the primary concern.
Key Considerations for Different Situations
Your best choice depends on your circumstances. If you are traveling for business, your personal policy may not apply; verify with your employer. If you are renting abroad, your U.S. auto policy and credit card coverage might be invalid or insufficient, making the rental company's insurance a safer bet. Always document the car's condition with photos or video before driving off the lot.
| Coverage Type | What It Protects Against | Typical Cost (Per Day) | Key Consideration |
|---|
| Loss Damage Waiver (LDW) | Damage to or theft of the rental car | $20 - $40 | Often redundant if you have personal auto insurance or credit card coverage. |
| Liability Insurance Supplement | Injury/property damage you cause to others | $10 - $20 | Your personal auto policy may already meet state minimums. |
| Personal Accident Insurance | Medical bills for you and passengers | $5 - $10 | Often duplicates your personal health or life insurance. |
| Personal Effects Coverage | Theft of personal items from the car | $5 - $10 | Usually covered by your homeowner's or renter's insurance policy. |
| Roadside Assistance | Towing, lockouts, flat tires | $5 - $10 | May be offered by your auto club (AAA) or credit card. |
