Rental Car Insurance - Need Car Insurance for Your Rental Car?

Traveling can be a whole lot of fun especially for holiday travelers looking forward to some rest and recreation. But whether you're traveling to attend a professional conference or to sip martinis off an island beach, one thing remains common besides hotel accommodations - rental cars. If you've ever signed your name on the dotted line for a rental car, you would, in all likelihood, have contemplated whether or not to purchase the car damage waiver offered. Do you need car rental insurance for your rental car?

Don't be so quick to say no even if your insurance policy covers rental cars. True, many travel experts will tell you paying car rental insurance is an unnecessary expense. They say so because some personal policies cover damage to a rental car. Premium credit cards may also come with accident insurance. All these notwithstanding, you are probably best off signing the agreement with your car rental company so that you absolutely won't be held liable if the car in questions is damaged or stolen. Here's why:

1. Not all policies cover car rentals outside of the country. Often, coverage is for US only. If you're renting a car in Paris or London even with the same rental company you use back home, you'd be burdened with charges when you don't carry car rental insurance and meet an accident while driving it.

2. Premium credit cards normally offer secondary accident coverage. Very rarely would you find a credit card that offers primary accident coverage. What difference does this make? A secondary insurer pays you only after you've filed claims with a primary insurer.

3. Your policies do not cover all charges the car rental company makes on your credit card. Damage, from the point of view of the car rental company, is not only the cost to repair the vehicle in question. Understanding this is perhaps the biggest reason why the answer to the above question is a resounding yes.

What You're Liable For

When you meet and accident or lose a rental car without a CDW, your car rental company will charge you what the CDW would have covered. Here's a short list of mostly likely charges that will appear on your credit card (yes, they have that little detail, don't they?):

Cost of Repair - this is common and this is what your personal policy normally covers.

Lost Income - the amount of money the car rental company lost while the vehicle is out of commission.

Diminution of Value - an estimated sum the car rental company would lose if it sells the vehicle.

Keeping Yourself Protected

Car rental insurance could be such a hassle, true. But if you'd rather be sure you won't encounter an even bigger hassle later, you'd let yourself get sold on the pitch and take the collision damage waiver or take out a car rental insurance. Otherwise, if you'd like to assure yourself it's not an unnecessary expense, read the agreement you're signing with your car rental company. Make sure you have coverage for what they'd hold you liable when you meet with an unfortunate event.