Rental Car Insurance Coverage: Is it Worth it?

Rental car insurance coverage can be expensive and a duplication of efforts when it comes to purchasing through a rental agency. In general there are two main types of coverage. Collision Damage Waivers (CDW) and Loss Damage Waivers (LDW). They can range from $9-$19 per day, and for travelers on the road for more than a week or so, the charges can add up. You may end up spending close to double what you budgeted for your rental car expense. Whether or not it's worth the price is debatable, and it all depends on various factors.

Know Your Insurance Policy

Before you travel, call your auto insurance agent to find out what your policy covers with respect to rental cars. In most cases, if you, the policyholder, have collision and comprehensive coverage, you will be paying for coverage you already have through your insurance.  Additionally, your health insurance will also offer protection for any medical expenses. 

However, if your policy is liability only, you may be the wiser to purchase insurance from the rental company. Know your policy before you travel.

Contact Your Credit Card Company

Often, credit card companies offer coverage for rental cars charged on the account. Do your homework before your trip to find out if your credit card company has this type of travel or rental car insurance and what the details are. It varies from company to company, and they may change the rules since your last trip, so it's prudent to check each time. Some credit card insurance coverage only offers protection for damage to your rental vehicle, not to other cars or property.

Loss or Stolen Personal Items

Most rental agencies offer insurance coverage for personal items stolen from your rental vehicle for a small daily fee ranging from $2-$5.  Depending on your auto insurance policy, this may be a smart option, as some auto insurers do not pay for personal items stolen out of a vehicle. In some cases, personal items may be claimed under homeowners or rental insurance. However, policies vary depending on the type of coverage you have.

Bottom line when it comes to rental car insurance, call your credit card company and auto insurance company before you rent your car.