Car Rental Insurance: Are You Covered?

There’s always a moment of hesitation when you’re standing at the car rental counter and the clerk asks, “Do you want additional insurance?” Do I, you ask yourself, quickly wondering what your personal auto policy or credit card do and do not cover while driving a rental car. As your travel agent, we have answers to all your travel-related questions, even this one.

Your personal auto policy does cover you when driving a rental car, but how much depends on your policy. If you already have comprehensive and collision insurance for your own car, then buying the rental insurance, called CDW (collision damage waiver – also known as LDW, or loss damage waiver), would simply duplicate coverage. If you turn down the CDW, you still have to pay your deductible if the car is stolen, vandalized or damaged in a crash. If you have a bare-bones auto policy without comprehensive and collision coverage, the rental insurance is a wise investment.

Credit cards can include collision and theft protection if you charge the rental, but coverage varies. Some credit card policies cover only damage to your rental car but not to other cars, while some fail to offer personal liability coverage for injury or death claims. The benefits they offer are secondary to your auto policy, which means you will need to pay the deductible of your personal insurance in the event of a claim, which may cause your rates to increase

Insider’s tip! Those of you with an American Express^® card can purchase Premium Car Rental Protection, which provides up to 42 days of protection for a one-time charge of $24.95. This plan offers primary coverage for damage to or theft of your rental vehicle, so you can bypass your personal insurance company if you need to make a claim.

So why choose the CDW? By purchasing the CDW, you are no longer responsible if the rental vehicle is damaged by an accident, vandalism or theft loss. That is, as long as you do not violate the rental agreement by driving recklessly or under the influence of alcohol, which would void the waiver.

The issues here are complex, so before your next trip to the rental car counter, do your homework. Find out how much your personal policy covers, which will be a good indicator on whether or not you should purchase the CDW.

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