Should You Get Rental Car Insurance?

When you're renting a car, you may be asked if you would like to purchase rental car insurance. You may have your own car insurance, but should you still get rental car insurance? The answer is not a simple yes or no, but rather depends on your current car insurance coverage and the rental car company's terms and conditions.

What Does Rental Car Insurance Cover?

Rental car insurance usually covers collision damage and theft or loss of the rental car. It can also cover towing and labor costs in case of an accident. As with any insurance policy, your coverage will depend on the specifics of your contract. Additionally, your existing car insurance may cover some of these costs. Before you commit to a rental car insurance policy, make sure you understand what you're getting and that you're not paying for duplicate coverage.

Does Your Current Car Insurance Cover You?

Before you buy rental car insurance, check with your current car insurance provider to see if you are already covered. Most personal auto policies will extend liability and collision coverage to rental cars, but you may have to pay a higher deductible. Comprehensive coverage may also be extended to rental cars, but you will likely have to pay a higher deductible. Make sure you understand your policy before you commit to any rental car insurance.

What Does the Rental Car Company Offer?

Rental car companies usually offer a Loss Damage Waiver (LDW) or a Collision Damage Waiver (CDW). This type of insurance waives the rental car company's right to claim against you for any damage to the rental car. If you already have comprehensive coverage, this type of insurance may be redundant. Additionally, if you are renting a car in the U.S., most states already require rental car companies to provide this type of coverage. Before you purchase any additional insurance from the rental car company, make sure you understand what you're getting and that you're not paying for duplicate coverage.

Personal Accident Insurance

If you're getting rental car insurance, you may also want to consider Personal Accident Insurance (PAI). This type of insurance covers medical costs and death benefits if you are in an accident while in the rental car. If you already have medical insurance and life insurance, you may not need PAI. However, if you don't have this type of coverage, or if your coverage has insufficient limits, PAI may be a good option to consider.

The Bottom Line

Whether or not you should get rental car insurance depends on your current car insurance policy and the rental car company's terms and conditions. Before you commit to any rental car insurance, make sure you understand what you're getting and that you're not paying for duplicate coverage. If you're unsure about what type of coverage you need, you should contact your car insurance provider or rental car company for more information.