Rental car insurance covers you when you rent a vehicle directly from a rental car company. When you’re renting a car at the airport or at another rental car location, you will be asked whether you want to add insurance to your rental or if you want to waive the insurance. This coverage is not to be confused with rental reimbursement coverage, which is an add-on to your auto insurance policy that provides reimbursement for fees associated with a rental car in the event your own car is being repaired due to a covered loss or accident.
The collision damage waiver or loss damage waiver offered by the rental car company means that if your rental car is damaged or stolen, you don’t have to pay to repair or replace it. These waivers typically include a deductible, however.
It’s wise to purchase this type of rental car insurance. While your regular car insurance policy may include collision coverage for rental cars, it most likely includes a deductible and may not pay for all the rental car company's charges, such as loss of use (charges for the money the company's losing while its car is in the shop).ii Your credit card may include free collision damage coverage, but credit card rental car insurance is typically secondary coverage, meaning any claims will go first to your auto insurance company.
The most affordable way to ensure adequate protection in case of collision or theft is with third-party rental car insurance. The OneTrip Rental Car Protector from Allianz Global Assistance provides affordable collision loss/damage insurance coverage up to $50,000.
Unlike the waivers rental car agencies sell, the OneTrip Rental Car Protector is actual insurance that can protect your rental car almost anywhere in the world.
Liability insurance typically covers damages to other people's property (e.g. their cars) as well as medical costs for other people’s injuries in an accident you're legally responsible for.iii In the U.S., every state requires a minimum amount of liability insurance on car insurance policies, so you may already have liability coverage through your personal auto insurance.
Someone trying to sell you rental car insurance may say your liability coverage is too low and encourage you to buy supplemental insurance. If you're worried about liability, there's a better way to protect yourself. The Insurance Institute of America suggests buying "umbrella liability insurance," a low-cost policy added to your auto and homeowners (or renters) insurance that can provide extra protection while driving your car or a rental.iv
U.S. auto insurance policies often don’t provide any coverage abroad, so you may want to — or you’ll be required to — purchase liability insurance when you’re traveling overseas.
While liability coverage covers other people's property damage and injuries in an accident, personal accident coverage includes medical, ambulance and death benefits for you (the rental car driver) and your passengers.
Probably not. According to Consumer Affairs, the benefits provided by personal accident insurance may already be included in your health, life or car insurance policies — or they may be included in the coverage the car rental company provides. If you’re traveling overseas, where U.S. health insurance may not be accepted, then you should carry travel insurance with emergency medical benefits and emergency transportation benefits. These benefits are broader than personal accident insurance, because they can cover your medical expenses in an emergency overseas, whether or not it was caused by a car accident.
Personal effects coverage covers the theft of possessions from the rental car, up to a set dollar limit.
Probably not. If you have a homeowners or renters insurance policy, you may also be covered for loss of personal items stolen from your car.v Check your policy documents to be sure. And if you have travel insurance with baggage loss/damage benefits, you may be protected if your baggage is lost, damaged or stolen while you’re traveling.
If you’re a frequent traveler, an annual travel insurance plan may be your best bet to protect your rental car, your baggage and your finances. The AllTrips Premier Plan, for instance, includes the rental car collision damage waiver, $2,000 in baggage loss/damage benefits, and a slew of other travel insurance benefits that cover you for a 365-day period.
The easiest way to figure out what rental car insurance you need? Do your research before you're standing at the rental car counter. Check your car insurance coverage and your credit card coverage options. Buy low-cost collision loss/damage insurance ahead of time. And if you impulsively check "yes" on all the insurance options offered by the rental car company, don't let buyer's remorse ruin your vacation (and your budget). The company may let you cancel the coverage if you return to one of its offices the next day
When renting a car, you’ll encounter various optional insurance coverages offered by rental car companies. Let’s explore them: