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Rental Car Insurance: Do You Really Need It?



Renting a car can be a convenient and affordable way to travel, but it also comes with some potential risks. One of the biggest questions that renters face is whether or not to purchase insurance coverage from the rental car company. While some types of coverage may be necessary, others may be redundant if you already have coverage through your personal auto insurance policy or credit card benefits. In this article, we’ll explore the different types of rental car insurance available and help you determine whether or not you really need it.

Understanding the Different Types of Rental Car Insurance:

  • Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW): CDW or LDW is designed to cover the cost of damages to the rental car in case of an accident or collision. It usually comes with a high deductible and can add significant costs to your rental fee.
  • Liability Coverage: Liability coverage covers damages or injuries that you may cause to another person or their property while driving the rental car. It is required by law in most USA states and Canadian provinces and, is often included in the rental fee.
  • Personal Accident Insurance (PAI): PAI covers medical expenses for you and your passengers in case of an accident. However, if you have health insurance or travel insurance, you may not need this coverage.
  • Travel Insurance: If you already have travel insurance, it may cover rental car-related issues, such as trip interruption or cancellation due to a car accident. Be sure to check with your insurance provider to see what coverage is included.

Do You Really Need Rental Car Insurance?

Whether or not you need rental car insurance depends on a variety of factors, including your personal auto insurance policy and credit card benefits. Here are some things to consider:

  • Personal Auto Insurance: If you have a personal auto insurance policy, it may cover rental cars as well. Check with your broker or insurance provider to see what coverage is included and what deductibles apply.
  • Credit Card Benefits: Many credit cards offer rental car insurance benefits, such as coverage for damage or theft of the rental car. However, these benefits may be secondary to your personal auto insurance policy and may not cover liability or personal accident insurance.
  • Trip Length and Destination: If you are only renting a car for a short trip, it may not be worth it to purchase additional insurance coverage. Similarly, if you are traveling to a country where your personal auto insurance policy does not apply, you may need to purchase additional coverage.


In conclusion, rental car insurance can be a complicated and expensive topic, but it’s important to understand the different types of coverage and whether or not you really need them. Collision damage waiver, liability coverage, personal accident insurance and travel insurance are all important types of coverage to consider when renting a car. However, if you already have coverage through your personal auto insurance policy or credit card benefits, you may be able to save money by declining additional coverage from the rental car company. Before making a decision, be sure to review your insurance policies and consider your trip length and destination. By being informed about your options, you can make the best decision for your rental car needs.

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