The Four Types of Car Rental Insurance Coverage
Typically, car rental companies will have four different types of coverage that you can choose to accept or decline when you’re checking out your rental vehicle. These differ slightly from what you would be offered by an auto insurance company just because rental is temporary coverage, but they protect you in more or less the same way to give you peace of mind behind the wheel.
However, note you might already have some (or all) of these types of coverage from other pre-existing policies you own, so be sure to look over your own insurance options and your coverage limits before you make any extra purchases at the counter. In some cases, you might just need one or two types or even just an add-on, rather than spending money on all of them.
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Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW)
Essentially collision insurance, this has you covered in the case of damage to the rental car. In the case of a standard auto accident where you crash into something accidentally, having this type of coverage will make sure that you’re not left paying for repair costs if the rental car is damaged. This even protects your rental car from theft if it is stolen while under your contract.
You might already have this coverage through a car insurance policy you already own or even through your credit card company. If you already have an auto insurance policy for your own car, check if you have collision and comprehensive coverage. This could extend to a rental car if you rent in the U.S. or Canada. In this case, you would still need to pay your deductible.
Unlike collision insurance, which protects the rental car against damage or theft, liability insurance is here to protect you against damage you might cause to other people’s vehicles or personal property. Say you’re found at fault for causing a fender bender or even property damage, like backing up into someone’s fence. This coverage can help you avoid paying out of pocket.
You may already have this through your own car insurance policy with liability insurance. Note that there could be international exclusions on a rental agreement if you rent a car outside of the U.S. or Canada. You can also buy additional protection at the rental agency if your own policy only provides minimal coverage. This will typically cover damage from $300,000 to $1 million.
Personal Accident Coverage
Personal accident insurance is here to help you pay for medical bills in the case you and/or your passengers are hurt in an accident. The last thing you want to worry about on vacation is going to the hospital and making medical payments in a foreign country. Some car rental companies will use this coverage for emergency medical care, transportation, and other unexpected costs.
You might already have this through your own health insurance policy. Check to see if your pre-existing policy offers international protection or travel medical insurance. Also, your own auto insurance policy might offer personal injury protection (PIP) or medical payments coverage for medical expenses, like ambulance or hospital bills, in the U.S. or Canada.
Personal Effects Coverage
With this coverage, you have peace of mind knowing that your personal items are covered (up to a certain cash value) if they are stolen from the rental car. Similar to personal property coverage, this type of car rental insurance makes sure you get a reimbursement to help pay the costs of replacing your things. Items like luggage, camera equipment, and more are all insured.
You might already have this through your own homeowners or renters insurance policy. Check your policy or speak with an agent to see if your possessions are protected from theft, even when traveling out of the U.S. or renting a car overseas. However, filing a claim on your own policy could cause your rates to rise, just like how they would with an auto insurance claim.
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