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When you reach the rental car counter, you will be asked if you would like to purchase insurance for your rental car. What people fail to realize is that your car insurance policy probably covers your rental car as well. Before you go on vacation where you will be renting a car, check you car insurance policy to see if your policy will cover your rental car. Doing so will keep you from buying coverage that you already have.
Avoid Buying Duplicate Car Insurance Coverage
One exception to this is what is called Collision Damage Waiver, or CDW. This extra daily charge covers both the cost of damages to the rental car if you are involved in an accident and the "loss of use" that the rental company will charge you. "Loss of use" means the time and money the rental car company lost since the vehicle could not be rented. While the damage to the vehicle itself may be covered by your personal auto insurance policy, the "loss of use" very likely will not be.
Also, many rental car companies will expect payment right away; meaning if you did not purchase CDW, you may have to pay out of your pocket, and then wait to be reimbursed by your personal auto insurance company. For these reasons, it may make sense to pay around $8-11 extra per day that most rental car companies charge you for CDW.
When renting a car in another country, your personal insurance coverage probably will not extend to a car rental. In this case, your best option is to at least buy the Collision Damage Waiver (CDW) from the rental agency.
Credit Card Car Rental Insurance Coverages
Some credit cards may offer coverage for damage or theft to your rental car if you use that card to rent the vehicle. This could replace the need to purchase CDW; if your credit card does offer this feature, this in addition to your personal auto insurance policy could mean you are covered and do not need to purchase any extra coverages through the rental car company.
If you are going on vacation and know you will be renting a car, make sure to contact your car insurance provider to see if you will need to buy any additional car insurance at the rental counter. Also, make sure you compare car insurance quotes at least twice a year to make sure you are paying the lowest price for your car insurance policy.
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