Your comprehensive guide to rental car insurance

Should I purchase rental car insurance? Absolutely! When renting a vehicle, obtaining rental car insurance is highly advisable. This guide will explain where to buy insurance, what coverage options to select, and what those policies entail.

Is rental car insurance necessary?

The brief answer is: yes, you definitely need it! The challenge lies in understanding which type of insurance is essential, where to obtain it, and what the various policies encompass.

If you're seeking affordable options, be sure to check the coverage of your existing insurance policies to potentially save on costs.

Where can I obtain rental car insurance?

Several companies offer car rental insurance. Here are your choices:

• The insurance provided by the car rental company
• An independent insurance agent
• Travel insurance policies
• Your personal car insurance
• Your credit card benefits

Each of these options comes with varying prices, coverage levels, and convenience. For instance, while it might be simpler to secure rental car insurance directly at the counter when picking up your vehicle, it may not be the most economical choice.

Independent insurance can be a convenient alternative without the high costs. Insurance companies have assessed the needs of car rental agencies and developed coverage options for most rental car situations.

When exploring car rental options on Dinogo, you might find the choice to include insurance from an independent broker in your booking; this way, you can understand your coverage before even reaching the car rental counter to collect your vehicle.

Insurance coverage often has limitations based on location and circumstances. Be sure to verify where your coverage is valid and what specific situations are included or excluded. Your insurance may only apply if you're driving in your home country, and most insurers won't cover incidents involving a driver who has exceeded the local alcohol limit.

Does my personal auto insurance extend to rental cars?

Will my car insurance cover rental vehicles? The answer often varies: it depends. It's certainly a good idea to consult your personal auto insurer. Some policies do include rental coverage, so speak to them before adding a potentially expensive policy to your rental agreement.

If you lack comprehensive coverage for your personal vehicle, it's likely that your insurance won't apply to your rental car either. Nowadays, most insurance only covers the specific car listed in the policy. This means you won’t be protected if you damage a friend’s car or a rental. Some policies do cover driving other vehicles, but the coverage may be limited and often excludes driving overseas.

Typically, you'll be covered for personal use only, not if you’re renting a car for business purposes. 

Which credit cards provide rental car insurance coverage?

There are numerous excellent credit cards available that allow you to earn miles and gain airline status while also offering a range of insurance policies. Be sure to review the fine print of your card to understand the benefits it includes. Cards such as the United Club Infinite Card, Chase Sapphire Preferred Card, and Capital One Venture X Rewards Credit Card offer benefits like Auto Rental Collision Damage Waiver.

Make sure to check the requirements, as some cards may require you to use them for your rental booking for the insurance to apply. Additionally, some cards might restrict coverage to a specific time period or geographical area.

Coverage for rental car insurance

Car rental insurance usually covers three primary areas: damage, theft, and third-party liability. Damage coverage includes harm to the rental car’s bodywork, which encompasses most of the vehicle’s exterior, such as bumpers, fenders, and doors. However, this typically does not cover windows, wheels, or the interior. The maximum amount you may need to pay for damages is known as the deductible.

Theft coverage ensures you won’t incur the cost of a new car if the rental vehicle is stolen or damaged during an attempted theft. Again, your maximum expense would be the deductible from the theft protection policy.

Third-party liability comes into play if you injure someone or damage property while using your rental car. This policy typically has a cap on the amount it will pay to the affected third party.

These are the three fundamental types of coverage, but there are many additional policies that can cover various scenarios. What if you suffer an injury in a rental car? What if your belongings are stolen? Or if you get into an accident with an uninsured driver? There are policies available to protect you in each of these cases as well.

What type of rental car insurance should I choose?

Now that we understand what a policy can cover, it’s crucial to identify which type of insurance applies to each coverage option. Rental car insurance comes with various confusing acronyms, scenarios, and regulations that differ from one city to another.

Essentially, there are six types of coverage based on their purpose. You’ll encounter insurance that protects the rental vehicle, other individuals and their property, personal injuries, and roadside assistance. Here’s a straightforward overview of your options:

Collision Damage Waiver (CDW)

A Collision Damage Waiver, commonly referred to as CDW, is an optional insurance policy that covers damage to your vehicle during your rental period. In many countries, a CDW is bundled with an LDW (Loss Damage Waiver), which also includes theft protection if your rental car is stolen. However, in the USA and Canada, these policies are often sold separately.

Supplemental Liability Protection (SLP)

Liability Insurance may go by various names, such as Extended Protection (EP), Supplemental Liability Insurance (SLI), or Third Party Liability (TPL). It is an optional insurance policy that you can add, covering damages to others' property and medical expenses for injuries to others in an accident for which you are legally responsible. In many countries outside the US and Canada, this 'third-party' insurance is mandated to be provided by the rental company. In the US, it typically isn't included, but if you own a vehicle, you might already have liability coverage through your personal auto insurance.

Personal Accident Insurance (PAI)

Personal Accident Insurance provides coverage for the driver or policyholder. It can help cover costs related to an accident, such as ambulance fees and other medical expenses. Additionally, Personal Effects insurance can safeguard the driver’s belongings against theft or loss.

Roadside Assistance

Accidents can occur… flat tires, mechanical failures, electrical issues, etc. If you're unsure how to get your rental car back in working order, you might want to consider this type of insurance.

Loss Damage Waiver (LDW)

A Loss Damage Waiver, commonly known as LDW, is an optional insurance policy that covers you in the event your vehicle is damaged or stolen during your rental period.

Personal Effects Coverage (PEC)

Ultimately, the question of “how much is car rental insurance” hinges on various factors that relate to your preferred level of coverage. Insurance policies generally cover costs up to a specified limit, with payments either handled directly by the insurance company at the time or reimbursed to the policyholder following an investigation.

Thoroughly reviewing the terms and conditions of your rental agreement and comparing insurance options is the most effective way to save time and money, allowing you to enjoy a stress-free trip while feeling secure and protected.

How does my destination influence my insurance requirements?

While all rental car insurance policies are important, some are truly essential and can save you a lot of hassle in the event of an incident. A crucial policy is Third Party Liability Insurance, which covers damage to others and their property. You should also strongly consider adding Collision Damage Waiver, which protects you against damages to the rental vehicle.

Be sure to inquire about the excess associated with any policy you add. If the excess is particularly high, you can opt for Car Rental Excess Insurance to cover that. Additional coverage options to consider include Roadside Assistance, especially if you're traveling in a foreign country, and Personal Accident Insurance, which helps with your expenses in the event of an accident.

When deciding which policies to select, consider the type of roads you’ll be driving on and the climate, as rough terrain may necessitate a higher level of insurance coverage.

Car rental insurance in the United States

When traveling in the US, each state may have different regulations regarding required insurance, but generally, the three essential types you should always have are Third Party Liability Insurance, which is mandatory, and either Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). It's important to note that LDW encompasses both CDW and Theft Protection, ensuring you are covered for theft of the vehicle and any damages incurred during your rental period due to theft.

Rental car insurance in the UK

When renting a car in the UK, the insurance policies offered are similar to those found in other parts of Europe and the US. The key point is that Liability Insurance is the only policy required by law. Collision Damage Waiver is not legally mandated but is frequently included and highly recommended.

Car rental insurance in Europe

When renting a car and exploring Europe, you may find that certain insurance policies like Collision Damage Waiver, Third Party Liability, and Theft Protection are already included in your contract. Some of these may come with an excess, and if you'd like to eliminate it, consider purchasing an Excess Waiver policy. However, be sure to review the fine print regarding what is covered and what isn’t. If you plan to drive across borders in Europe, it’s crucial to verify the car rental policy and confirm that you have coverage in all the countries you intend to visit.

How does Dinogo determine what to include in this guide?

Having rented cars and driven across various countries, I’ve always believed that solid insurance is essential for safe driving. As a broke student frequently renting cars, I learned how to evaluate insurance options and choose the coverage that best suited my needs.

The Dinogo team contributed their expertise to this guide, ensuring that you can rely on our shared experiences to help you find the best car insurance for your rental vehicle.