There are lots of reasons you might rent a car, but the process of actually getting the vehicle can be more complicated than you realize when you are booking the reservation. Whether you’re flying to Florida with your family and need a vehicle during your stay, or you are a city-dweller who doesn’t own a car and want to take a road trip, when you arrive at the rental counter you can expect that you’ll be presented with numerous add-on insurance options that can be confusing. Fortunately, with a little homework in advance, you’ll know what you might need, and what you don’t.

Should you purchase any of the additional insurance that is offered on your rental?

Maybe you’ve just landed at your destination after a long day of traveling. You collect your baggage and head to the car rental counter. You are ready to sign the rental agreement, get your keys, and be on your way, but you first must determine if you should additional insurance and coverages such as a Collision Damage Waiver (CDW), Supplemental Liability Protection (SLP), Personal Accident Insurance (PAI), and Personal Effects Coverage (PEC).

These insurance options can increase the cost of the rental by as much as $30 per day – or more!  Whether you need the insurance or not really depends on your personal circumstances and where you are traveling. If you currently own a car and carry collision coverage, or if you are using a credit card to pay for your rental, you may already have sufficient protection in the event of an accident or theft. However, if you own an older car and only have liability insurance, or if you have a high deductible on your auto policy and want to avoid a claim, it might be a good idea to purchase the additional coverage.

Here are some things to consider in advance of your arrival:

  1. Are you renting in the United States or Canada? Many insurance policies which will cover your rental in the US and Canada but may not extend the coverage internationally. You may have no choice but to purchase the car rental company’s insurance if you’re traveling abroad.
  2. Do you have high deductibles on your current auto coverage? If you have to file a claim with your personal auto policy it could possibly cost you more than the rental car insurance coverage, which often carries no or low deductibles. Additionally, a claim on your personal policy could result in a rate increase.
  3. Do you have a robust insurance plan on your own vehicle? If you do not, and you insure your car with the minimum allowable amounts, you may want to add coverage from the rental company.
  4. Does your credit card provide coverage? Call your credit card company to find out if you have coverage and how much.

What additional insurance will be offered to you by the rental company?

  • Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW)/Physical Damage Waiver (PDW) – This waiver can cost around $9 – $12 per day depending on the type of vehicle you rent. Provided you abide by the terms of the rental agreement, you won’t be responsible for the cost if the car is damaged or stolen. While a personal policy with collision and comprehensive would likely cover you in this situation, if you only have liability insurance you could be left with a very expensive bill if you don’t add this waiver. Many premium credit cards provide this coverage when using their card to pay for the rental, but may not offer the benefit on luxury cars, SUVs or vans.
  • Supplemental Liability Protection (SLP)/Liability Insurance Supplement (LIS)/Supplemental Liability Insurance (SLI) – You should check your auto policy and umbrella policy before purchasing this additional insurance. While it usually provides $1 million of liability protection, your own policies may provide you with adequate coverage without the need for more.
  • Personal Accident Insurance (PAI) – PAI provides medical, ambulance and death benefits for the renter and passengers if there is an accident. If you already have health, life or auto insurance, you may already have enough coverage, and each passenger’s individual health insurance policy may cover them in the event of an accident with injuries.
  • Personal Effects Coverage (PEC) – If items are stolen from the vehicle, a homeowners or tenants insurance policy may offer you enough protection without the need to purchase additional coverage.

Make a few calls before you travel.

For peace of mind and a clear understanding of what you may already have coverage for, consider reviewing what’s available to you with your:

  • Auto insurance
  • Homeowners or renters insurance
  • Umbrella insurance
  • Health insurance
  • Credit card company

There is no one-size-fits-all answer as to whether you should elect to purchase additional insurance at the car rental counter. But, if you take the time to research ahead of your trip, you can make an informed decision that is right for you. Please contact us if we can answer any questions.