Renting a car excites you, whether you're on vacation, traveling for work, or need a temporary ride while your car undergoes repairs. However, one part of the rental process often leaves people confused: insurance.
You might wonder if you need extra coverage from the rental car company. Perhaps you think your personal auto policy or credit card already covers it, or you do not want to pay more fees. But guessing wrong can lead to serious problems if you have an accident.
If you have questions about a rental car accident or need help resolving insurance issues, reach out to an Atlanta car accident lawyer today.
Table of contents
- Why Is Rental Car Insurance Important?
- What types of coverage do insurers commonly offer?
- Does Your Auto Insurance Apply to Rental Cars?
- Will My Credit Card Cover My Rental Car?
- How Does a Collision Damage Waiver (CDW) Work?
- Should You Buy Supplemental Liability Insurance?
- Common Mistakes With Rental Car Insurance
- When Should You Consider Declining Extra Insurance?
- Why Read the Fine Print Before You Sign?
- Are There Gaps in Coverage to Worry About?
- Why You Need an Accident Lawyer After a Rental Car Crash
- What Should You Do Before You Sign the Agreement?
- Reach Out to a Car Accident Lawyer Today
Why Is Rental Car Insurance Important?
Car insurance protects drivers from huge expenses after an accident. When driving your car, you likely have an auto insurance policy covering collision, liability, or both. But does this same protection automatically carry over to a rental car? Sometimes it does, but sometimes it does not. That is why learning about rental car insurance is so important.
A crash can happen in any vehicle. If you are at fault or someone hits you and does not have enough coverage, you might be stuck paying repair bills, medical expenses, or other damages on your own.
Rental cars can also be more expensive to fix or replace than your car, especially if the rental company charges extra fees. Also, some people are not used to driving in a new place or a different type of car, which can raise the risk of rear-end accidents or more serious collisions.
Insurance matters because it protects your finances and gives you peace of mind. If you rent a car for a weekend road trip or a long vacation, you will not want the stress of worrying about a possible accident. Instead, you want to focus on enjoying your trip. Having the right insurance coverage helps you do that.
What types of coverage do insurers commonly offer?
Rental car companies often offer several types of insurance at the counter. Some of these might overlap with coverage you already have, or they might offer new protections you did not think about.
These common coverage types include:
- Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW): This is not a traditional insurance plan but a waiver. If you damage the car or it gets stolen, the waiver limits your financial responsibility to a certain amount. Without a waiver, you might have to pay the full cost of repairs or even the car's full value if it is totaled.
- Liability Insurance: This pays for damage you cause to other vehicles or property and may cover injuries to other people in an accident where you are at fault. Your auto policy might already include liability coverage, but the amount may not always extend to rental cars.
- Personal Accident Insurance: This coverage helps pay for medical expenses for you and your passengers after an accident in the rental car. Some people skip this if their health insurance covers injuries from car accidents.
- Personal Effects Coverage: This pays for your belongings if they are stolen from the rental car. However, many homeowners’ or renters’ insurance policies already cover the theft of personal items, even if you are traveling.
Each of these coverage types can cost extra. Some are sold as part of a package, while others are separate add-ons. Remember to check if your personal auto policy, travel insurance, or credit card already provides some of these benefits so you do not pay twice for the same protection.
Does Your Auto Insurance Apply to Rental Cars?
Some people have personal auto policies that extend coverage to rentals. But how do you know if yours does? Reading your policy or calling your insurance agent is the easiest way to find out. Suppose you already have full coverage (including collision and comprehensive) on your vehicle. In that case, that coverage often extends to a rental car for a short period—like a few weeks or a month.
Will My Credit Card Cover My Rental Car?
Certain credit cards offer rental car coverage as a perk. If you pay for the rental with that card, you might automatically get some insurance benefits. This coverage can be primary or secondary:
- Primary Coverage: Pays first if you crash the rental car, up to the coverage limits.
- Secondary Coverage: Kicks in only after you use your auto policy or other coverage.
Even if your credit card includes rental car benefits, they might have strict rules. For example, you often must decline the rental company’s collision damage waiver to use the card’s coverage. The coverage might exclude certain vehicle types, such as trucks, off-road vehicles, or expensive sports cars. There may also be a limit on how long you can rent the car while still qualifying for coverage.
It is a good idea to call your credit card company or check the terms online before you rely on this perk. Ensure you understand what is covered, the maximum limits, the types of vehicles allowed, and any country restrictions if you travel abroad. While credit card coverage can save you money, you do not want to find out too late that it does not apply to your situation.
How Does a Collision Damage Waiver (CDW) Work?
When you pick up a rental car, the clerk often asks if you want a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). This waiver means the rental company, not you, will take care of costs if the car is damaged or stolen.
Without it, you can be on the hook for the entire vehicle value if you get into a major accident. With it, you might avoid huge bills—unless you violated the rental agreement terms by driving recklessly or taking the car off-road.
However, the CDW can add a significant daily cost to your rental. If your personal auto insurance or credit card offers collision coverage, you might not need the waiver.
On the other hand, the CDW is convenient because it usually pays fast, and you do not have to file a claim with your insurer. It can also cover certain fees, like loss of use, that your auto policy might not cover.
If you decide to rely on the CDW, read the small print. Some waivers only cover part of the cost, and certain conditions might apply. Others may exclude damage to tires, windshields, or the interior. Asking the rental clerk for a summary of what is covered can help make an informed choice.
Should You Buy Supplemental Liability Insurance?
Liability insurance in a car rental context pays for damage you cause to someone else’s vehicle or property and injuries they suffer in an accident. You might already have liability coverage through your auto policy. If so, you might not need to buy more from the rental company. However, if you only have a small amount of liability on your personal policy or have no car insurance, you might want extra coverage when renting.
Some travelers rely on their personal umbrella policies, which offer high liability protection. Others prefer not to worry about using their insurance. They buy the rental company’s supplemental liability insurance to avoid a claim on their policy. It is a personal choice, but the extra cost might bring peace of mind if you are concerned about large lawsuits or do not have enough coverage at home.
Common Mistakes With Rental Car Insurance
Here are some common mistakes with rental car insurance:
- Skipping Coverage Without Checking: Some people decline all rental car insurance, assuming they are fully covered by their personal policy or credit card, only to find out later there are gaps.
- Not Reading the Agreement: The rental agreement often lists exclusions. The coverage might be void if you drive on unpaved roads or let someone else (not on the contract) drive.
- Overbuying Insurance: Others pay for every insurance option, not realizing their existing policy or credit card offers the same protections.
- Waiting Until the Last Minute: Many travelers do not consider rental car insurance until they are at the counter. Doing a bit of research in advance is often wiser.
- Not Reporting Small Damages: Minor scrapes or dents might seem unimportant, but failing to inform the rental company or insurer can lead to bigger headaches later.
By avoiding these mistakes, you can better protect yourself financially and avoid confusion if a problem arises.
When Should You Consider Declining Extra Insurance?
Sometimes, saying “no” to the rental company’s extra insurance makes sense. For instance, if you are certain your auto policy covers rental cars with strong, comprehensive limits for collision and liability, you might not need a Collision Damage Waiver or Supplemental Liability Insurance. Many credit cards offer similar coverage if you use them to pay for the rental.
However, be sure about these details before you say no. If you discover later you are underinsured, it may be too late to fix the problem. Also, if you do not mind handling the claim through your personal insurance or credit card—and possibly facing a hike in your rates—declining the extra coverage might save you money in the short term.
On the other hand, if you are traveling for business and your employer has a corporate policy that covers you, you might not need to buy extra insurance. Always follow your company’s guidelines. Some companies require you to accept certain protection from the rental agency, especially in a foreign country with different rules.
Why Read the Fine Print Before You Sign?
Rental agreements can be long and full of legal terms, but reading them (or at least skimming for important points) is wise. If the agreement states that you cannot let anyone not listed on the contract drive or that you cannot take the car off-road, ignoring these rules can invalidate your insurance. Then, if something goes wrong, you can be on the hook for the full cost of the repairs.
The fine print might also detail how to report accidents. Some contracts require you to notify the rental company and the police immediately, no matter how small the crash. Failure to do so can lead to a claim denial. Even if you buy the CDW, it often has exclusions, such as driving under the influence or using the vehicle in a race.
Knowing what you sign up for can avoid costly surprises later. If you are short on time at the rental counter, take a copy of the agreement with you and scan it while waiting for your flight or once you reach your hotel. Feeling safer than facing the risk of a misunderstanding that could result in thousands of dollars in expenses.
Are There Gaps in Coverage to Worry About?
There can still be gaps even if you combine your personal auto insurance, credit card benefits, and the rental company’s protection. For instance, your policy might pay for damage to the car but not for the “loss of use” fees the rental company charges while the car is in the shop. Your credit card might cover loss of use, but it can exclude certain vehicle types or rentals over 30 days.
You might also run into trouble if you plan to drive in another country. U.S. insurance policies often do not work abroad, or they might offer very limited coverage. Some credit cards also have restrictions on international rentals. In those cases, purchasing local insurance from a rental agency or a travel insurance company might be your best option.
To avoid these gaps, make a quick checklist before you travel. Call your auto insurer, check your credit card terms, and ask the rental company if there are any extra fees or exclusions. Your current effort can save you major stress and financial trouble later.
Why You Need an Accident Lawyer After a Rental Car Crash
You might need a car accident lawyer if you are involved in a collision with a rental vehicle. A few possible reasons include:
- Severe Injuries: Medical bills can be huge if someone has severe car accident injuries. A lawyer helps protect your rights and deals with insurance adjusters.
- Disputed Fault: If you and the other driver disagree about who caused the crash, a seasoned car accident attorney can gather evidence and prove your side.
- Insurance Complications: Rental car accidents can involve multiple policies—yours, the rental company’s, the other drivers, and even your credit card’s. A car accident attorney can help sort out what insurers should pay.
- Unfair Claims: The rental company might claim you owe extra fees or blame you for more damage than you caused. A lawyer can negotiate or fight these charges.
Consulting a car accident attorney is always smart. Many lawyers offer free initial meetings and operate on a contingency fee so you can decide if it is worth pursuing a claim.
What Should You Do Before You Sign the Agreement?
A few steps can ensure you make the right choice about rental car insurance. First, call your auto insurer to see if your policy covers rentals. Ask about liability, collision, and any limits. Then, check if your credit card offers rental car benefits and whether those are primary or secondary. Ask about any specific rules or limits. Finally, read the rental agency’s insurance details online or call them if you have time before your trip.
Reach Out to a Car Accident Lawyer Today
Do you have questions about a rental car accident or need help resolving insurance issues?
Reach out to a car accident lawyer today. Having someone in your corner can make all the difference when facing expensive claims and stressful conversations with insurance companies.