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What Type of Rental Insurance Do I Need?

By November 14, 2014May 21st, 2020Insurance


Each holiday season more and more Americans are on the road. During the 2009 holiday season 42.2 million people took a trip at least 50 miles away from their home. With many of these travelers renting vehicles it is important to fully understand car rental insurance. Purchasing car rental insurance should not be a snap decision, but should be something that is carefully considered before hitting the road.

When renting a car you can be faced with a myriad of choices for insurance. Before choosing any coverage it is wise to call your insurance agent to find out what coverage you already have through your auto policy. Your second call should be to the credit card company you will be using the pay for your rental vehicle. Many credit card companies offer different types of insurance benefits that vary by the company.

When renting a car remember there are four important types of coverage.

1. Loss Damage Waiver (LDW) this is sometimes called collision damage waiver. As the name states this is not actually an insurance product, it relieves a renter of financial responsibility if the rental vehicle is stolen or damaged. LDW also may cover towing and administrative fees. Loss damage waivers usually cost $9 to $19 a day.

2. Liability Protection is protection from lawsuits in case you are sued following an accident involving your rental car. By law rental companies have to provide the state required amount of liability insurance, however these amounts are often low, and don’t provide much protection. If you have adequate amounts of liability insurance on your own car you can probably forgo additional liability protection.  Liability protection usually costs between $7 and $14 a day.

3. Personal Accident Insurance covers medical and ambulance bills in the event of an accident. You may not need this coverage if you have adequate health insurance, or have personal injury protection under your own car insurance.

4. Personal Effects Coverage is insurance protection for the theft of personal items in your vehicle. You are usually covered for this if you have renters, or homeowner’s policy that includes off-premises theft coverage. Personal Effects Coverage usually costs between $1 and $4 a day.