Is It Worth Getting Rental Car Insurance?

When renting a car, salespeople at the counter will probably encourage you to purchase their company’s insurance as an added cost. But is it really worthwhile?

If your auto policy includes both liability and collision coverage, rental car insurance may not be necessary. But if only state minimum liability exists or none at all, an LDW may prove useful.

Coverage Options

At the rental car counter, you will likely be offered four kinds of additional insurance coverage: loss damage waiver (LDW), supplemental liability protection, personal accident insurance and personal effects coverage. Selling these policies is how many rental places make their money; each policy might meet different needs but each can add up to $30 a day to your bill – if already covered through auto or credit insurance policies it might make sense for you to decline extra protection policies offered here.

LDW protects you against paying the cost of repairing or replacing a rental car if it becomes damaged or stolen during your rental period. It’s an additional coverage available through collision and comprehensive car policies; but if your own policy doesn’t cover rentals abroad, or doesn’t offer LDW coverage options then consider this as well.

Supplemental liability coverage typically pays up to $1 million in case you damage either the rental car itself or another party’s property. If your own policy or non-car-owner policy contains enough limits, additional coverage may not be required.

Personal accident coverage provides cover for medical expenses incurred as the result of an accident in a rental car, both to you and any passengers in it. It may already be included as part of your own health or medical payments coverage plan; however, standalone policies can also be purchased.

Personal Effects Coverage can provide peace of mind if any costly electronics or jewelry may be in the rental vehicle that are lost, stolen, or damaged during its rental. While homeowners or renters’ insurance should cover your belongings adequately in this instance, extra protection can help bring comfort should anything go amis.

NerdWallet’s four major rated credit cards all include some level of rental car coverage as part of their benefits package, often as secondary coverage after your own auto or travel policies have paid out. Always read over all details carefully and speak to the card company to be certain.


At first, it’s important to consider your deductible amount. A deductible represents your financial responsibility in case of an accident or damage to a rental car; some rental car companies offer zero or low deductible options that mean no out of pocket expenses would need to be covered if damage or theft occur during your rental contract period; these may come at a higher daily rental rate though.

HAPPYCAR provides this coverage type with our zero deductible option to give you peace of mind without needing to place a large deposit upfront.

Depending on your car insurance coverage and vehicle selection, or if a rental company offers a luxury or expensive vehicle that your own policy doesn’t cover, purchasing a loss-damage waiver (LDW) at the rental car counter could provide valuable protection in case it becomes lost or damaged – provided all conditions of its contract have been fulfilled.

Liability coverage from rental car companies may provide protection in case of an accident, although their minimum liability limits may not provide enough coverage to fully safeguard you in such circumstances. Additional personal effects coverage (also called Supplemental Liability Coverage or PEC) is also available but this may not always be necessary if your home or renters insurance policies already include personal property coverage for these items.

Rental car insurance may not be legally mandatory, but it can help reduce extra out-of-pocket expenses. Before making the commitment to purchase rental car coverage from an agency or credit card company, check if their existing policies provide enough protection for rentals – you might be surprised how affordable and straightforward using existing coverage can be instead of purchasing unnecessary coverage through rental agencies.

Loss of Use

When renting a car, rental companies will attempt to sell you insurance. Salespersons may offer you collision damage waiver and personal accident coverage as an add-on, however your own auto policy likely covers you more effectively and any extra insurance from rental agencies could prove expensive.

Most credit cards provide some level of rental car coverage as an added perk, usually including liability insurance to protect drivers against their financial responsibility in case of accidents that cause bodily injury or property damage to others. Liability coverage is required by most states, making this essential protection essential for drivers on the road.

Credit card coverage typically offers collision protection. This will cover the costs associated with repairing or replacing a rental vehicle if it’s damaged in an accident caused by you, theft and vandalism – though this usually only applies for short-term rentals of 15 days or less; after that point it could either expire or no longer apply to that specific car you rented.

Rental car companies also sell loss-of-use coverage, which allows the rental car company to recover expenses incurred due to your accident and repair shop visit. Critics claim this practice may not be legal and could put you on tenuous legal ground if an incident arises.

In most instances, it is preferable to decline additional coverage from rental car companies. Your own auto policy should typically cover your rental, and adding this coverage is usually affordable and worth doing so. Salespeople at rental car desks often try to profit off selling unnecessary coverage; therefore it is crucial for you to learn about and understand your own policy before accepting additional coverage offered at sales counters.


Car rental companies usually provide an excess waiver to help offset the costs associated with repairing or replacing a vehicle, typically up to EUR/PS/$1,000-2,000 depending on car type. If damage exceeds this limit, renter will have to shoulder all expenses associated with repairs/replacements out-of-pocket. Additional coverage can reduce or even eliminate this risk altogether.

Many renters purchase insurance through their rental car company because they believe it to be cheaper than third-party coverage, however this could end up costing more in the long run. Most personal auto policies include rental coverage if stolen or damaged vehicles occur – speak to your agent or review your policy to determine this status; some credit cards also include it as a fringe benefit so be sure to ask before leaving home!

Most rental car insurance policies typically provide four types of coverage: Liability coverage, Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW), Personal Effects coverage and Medical Payments coverage. Liability coverage serves to protect you in case someone gets hurt during an accident caused by you; CDW/LDW helps minimize financial risk from damaged or stolen cars while Personal Effects and Medical Payments coverage offers added peace of mind in case an injury does occur; while Personal Effects/Medical Payments coverage covers personal belongings or medical costs in case an injury does occur during an incident; in case this coverage could apply – see the section above correspondingly!

Rental car companies tend to provide overpriced insurance policies that contain hidden exclusions that vary between policies, as well as hidden costs. Furthermore, these products aren’t mandated by law to cover you while driving abroad – alternatively CarInsuRent can provide coverage at half the price of excess reduction products being sold by rental firms, covering damage such as to windscreens, tires, overhead or under bodies as well as single vehicle accidents.