Car Insurance When Renting a Vehicle

As you are checking out, you will be asked whether or not you want an insurance policy on your rental vehicle. Do you need this coverage, or is it simply an additional cost to put more money in the rental agency's pocket?
There are four basic types of coverage: loss damage waiver, liability insurance, personal accident insurance, and personal effects coverage.
Loss damage waiver covers your liability for damage to the vehicle if it is in a collision. The rental company's insurance will cover the damage to the vehicle. Rental cars automatically come with some liability insurance, because the state law will require it. Because most drivers need more liability coverage than what comes with the vehicle, rental agencies offer liability insurance.
If you or your passengers are injured in a crash while driving the vehicle, your medical care could be covered under personal accident insurance. Personal effects coverage, the final type of coverage, will pay for any theft of the things you are transporting in the rental car. Keep in mind that your homeowner's or renter's insurance policy probably already covers the theft of personal belongings, even while traveling.
Do You Need Insurance When Renting a Car?
Before you sign up for the car rental company's insurance policy, make sure you really need it. Some of the insurance products you already own may cover the same things that these insurance products will cover. If you have collision and comprehensive coverage, you are probably already covered for a rental. However, if you only have liability coverage, you may want to consider purchasing the loss damage waiver when renting a car. When you call your insurance agent, find out if loss of use, towing, and administrative charges are covered if you were to wreck the rental.
Another place to look for existing coverage is with your credit card company. Many credit card companies that offer rewards programs automatically insure the rental cars rented with that card.