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Rental Car Insurance: Types, Coverage, and Recommendations
When looking at the different options for car rental insurance in
the
United States, you will
generally run into five options.
These are Loss Damage Waivers
(LDW) which are also commonly referred to as Collision Damage
Waivers (CDW). There is also Liability Insurance Supplement
(LIS), Personal Accident Insurance (PAI), and UMP, which is Un-
and Underinsured Motorist Protection. The fifth option is to not
take any rental insurance at all, but we'll get back to that one
later.
LDW/CDW
takes care of pretty much
everything.
It takes care of your own risks, plus if the car is
stolen or damaged, then Loss Damage Waivers will cover the
entire cost. This is by far and away the best insurance for car
rentals as far as coverage goes-but the price reflects it. Many
places charge $20-30 per day for this type of insurance, which
means even a single week can cost you an additional $210. This
insurance can be, and often is, even higher if you rent a
full-sized or luxury vehicle.
Liability Insurance Supplement is often in addition to whatever
other insurance you purchase. LIS covers you for the costs of any
damage or injuries that are a direct result of an accident you are
involved in. LIS is usually much cheaper than LDW/CDW, but this may
still cost you $8 a day and it adds up, though there is a definite
degree of reassurance from knowing you are covered.
The two other insurances that are generally offered are Personal
Accident Insurance and Uninsured Motorist Protection.
While both of
these may seem appealing at first glance because of cheaper prices,
don't be fooled. There is almost never a situation where you
actually need one of these. If you're going to buy insurance for a
rental car, then buy the larger policies that are more inclusive.
Saving $5 a day won't help if you get into an uncovered
accident.
Then there was the fifth option: not buying any. Insurance is
expensive, so it is important to see if this actually is an option
for you. Some car insurance policies automatically cover rental
cars, which makes any rental insurance both superfluous and
fiscally unsound. Also see your credit card company's policies.
Some of the more respectable credit cards have a policy to
automatically cover you as long as you put the rental on that card.
If either of this cover you, that is a much better route to go than
rental insurance from the agency itself.
All of that being said, make sure that you are not under
insured. Otherwise if you are involved in an accident you might end
up paying for any damages you shouldn't have to pay for.
Always
check each insurance policy for coverage and cost, and make sure
the first makes it worth the latter.
Dave is the owner of .info a website
that provides information on renting a car.
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