You typically need Liability Insurance, a Loss Damage Waiver (LDW), and Personal Accident Insurance (PAI) to rent a car, but your existing personal auto insurance policy and credit card benefits may already provide sufficient coverage. The only coverage that is often mandatory by law is Liability Insurance, which covers damage you cause to other people's property and injuries. The rental company will provide the state-minimum liability coverage, but you can purchase a Supplemental Liability Insurance (SLI) policy for higher limits.
The most common and often recommended additional purchase is the Loss Damage Waiver (LDW), sometimes called a Collision Damage Waiver (CDW). This isn't technically insurance; it's an agreement where the rental company waives its right to charge you for damage to or theft of the rental car. It's crucial to check if your personal auto policy extends to rental cars and what your deductible would be. Many premium credit cards also offer primary or secondary CDW coverage if you use that card to pay for the rental and decline the rental company's coverage.
Before you go to the counter, contact your auto insurance agent and your credit card benefits administrator to understand exactly what protection you already have. This can save you a significant amount of money.
| Coverage Type | What It Covers | Typical Rental Co. Cost (Per Day) | Key Considerations |
|---|
| Liability Insurance (SLI) | Damage/injuries you cause to others. | $10 - $16 | Mandatory; state-minimum is included, but SLI offers higher limits. |
| Loss Damage Waiver (LDW) | Damage to or theft of the rental car. | $20 - $35 | Not insurance; waives your financial responsibility. Check personal policy first. |
| Personal Accident Insurance (PAI) | Medical bills for you and passengers. | $4 - $9 | Often duplicates your personal health or auto insurance. |
| Personal Effects Coverage (PEC) | Theft of personal items from the car. | $3 - $7 | Usually covered by your homeowner's or renter's insurance. |
