Learning Center


Rental Car Insurance


Many of us think of the coverage offered on rental cars as a way for car rental companies to pad the bill. After all, what are the odds of accident or damage when driving a vehicle for such a short time? Is the insurance necessary?

Rental cars are insured, by contract, for liability, personal injury and other basic coverages. The big question is whether to add optional protection (a.k.a. collision damage waiver or loss damage waiver) or sign on the dotted line to refuse it. This option covers damage, theft and sometimes, additional liability coverage.

Part of the confusion in whether to accept or deny the optional protection is understanding the options. Most regular auto insurance policies cover the driver when using a rental car. If that is the case, purchasing the daily optional coverage is redundant. However, rental car coverage waivers may be required in foreign countries or for business travel. Some credit card companies claim to offer rental car collision coverage, but this is more of a secondary coverage where the driver is reimbursed only if an insurance company does not cover the claim.

If you have personal insurance that covers damage to a rental, don't stress about accepting the additional coverage, but the optional protection also becomes required for someone without any auto coverage. Damage or theft of rental cars can add up to big bucks.  Many rental companies not only charge for the physical damage to the vehicle but for an estimate of lost profit due to the vehicle being out of service.





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