If you’re planning to rent a car, you may be wondering who pays for any damage to the rental car. If you lack proper insurance, that person could be you.
While the rental car company typically has liability insurance that covers the bare minimum mandated by the state, you could still be left with hefty bills if you fail to adequately protect yourself. Policy Scout can help take the guesswork out of finding the right insurance for your rental car and provide you with the best possible quotes.
Rental insurance financially protects you in the event you get into an accident with the rental vehicle. It’s typically split up into several different types of coverage:
Collision damage waiver (CDW): This coverage — also known as loss damage waiver — protects you by paying for the expenses incurred when the rental car is damaged in an accident. CDW usually includes coverage for towing and the rental company’s “loss of use” fees.
Personal accident insurance: This pays for the medical expenses of you and your passengers if you have an accident while driving the rental. If everyone riding in the rental car has sufficient health insurance, then you may not need to purchase this coverage.
Personal effects insurance: This will reimburse you for any of your personal items that are stolen from or damaged in your rental car.
Liability insurance: This will cover you if you’re sued for causing damage to other vehicles, damage to property, or bodily injuries to others while driving your rental car.
You can buy rental car insurance from the rental car agency itself, from a third-party insurer, or as a rider on your personal vehicle insurance. Certain credit cards also sometimes offer limited rental car insurance. Note, however, that your personal car insurance or credit card insurance typically will not cover everything, and you will likely have gaps in coverage if you get in an accident.
For example, if your rental car is vastly more expensive than your own car, or if your personal auto insurance policy carries a high deductible, you should purchase additional rental car insurance to fully protect yourself. Additionally, some coverage offered by credit cards is only secondary, meaning it will only cover what your personal auto insurance fails to cover.