Auto Insurance on Rental Cars

Some people wonder if they really need to purchase the extra insurance coverage offered when renting a car. That really depends on the kind of auto insurance policy you have. When purchasing a policy, ask your agent if this auto insurance policy will cover rentals. Most people will have adequate comprehensive and collision coverage for their car and rentals. If not, you may be able to add rental coverage onto your policy. If your insurance does not cover rentals, you may want to purchase the rental insurance offered by the rental car company. Rental car companies usually offer these types of coverage:

• Collision Damage Waiver (CDW) or Loss Damage waiver(LDW): If your rental is involved in an accident or gets damaged somehow, this waiver relieves you of any financial responsibility.
• Supplemental liability insurance (SLI): Liability coverage up to $1 million.
• Personal Accident Insurance (PAI): Covers any medical expenses incurred by you or your passengers resulting from an accident.
• Personal Effects Coverage (PEC): In the event that any personal belongings are damaged, this policy covers that damage.

Sources

1. Do you really need car rental insurance?, Bill McGee. Retrieved April 18, 2008, from http://www.usatoday.com/travel/columnist/mcgee/2004-03-09-mcgee_x.htm
2. Things to Consider When Renting a Car. Retrieved April 21, 2008, from http://www.naic.org/consumer_auto_car_rental_insurance.htm