Rental Car Insurance and Waivers: Accept or Decline?

If you are an infrequent traveler, you may be caught off-guard at the rental car agency's counter when asked if you want insurance coverage. By adding the coverage the rental car company provides, the "good deal" you found on a rental car can quickly disappear and your rental car becomes the most expensive part of your trip. Therefore, it is good to know what coverage is necessary before renting a car.

The collision damage waiver (CDW) of the rental car agreement covers collision and comprehensive insurance. Comprehensive coverage is written in to the standard automobile policy in the event the car is stolen. Collision coverage may also be included in the personal automobile policy for damages to the car. It is safe to refuse this waiver if your current automobile policy contains collision and comprehensive coverage as long as the collision limits are high enough to cover the cost of the car you rent.

The rental car agency offers personal accident insurance for injury of you and your passengers. If you have your own medical benefits under health insurance and/or personal accident insurance in your automobile policy it is not necessary to sign up for this coverage.

Rental car companies are required by law to provide minimum liability coverage. Each state differs in the minimum amounts required but companies offer additional coverage of up to one million dollars within the car rental period. This can be expensive at $7 to $9 a day, but extra liability insurance can be a great benefit in the event of a serious accident. If your personal automobile coverage and/or homeowner coverage have adequate liability insurance you may opt to waive this option.

Most people are covered for lost or stolen personal belongings on their homeowner insurance policy, which includes belongings in your car. Certain big-ticket items like laptop computers might require additional coverage. Check your homeowners policy to make sure such items are covered.

Certain credit card companies offer a rental car benefit. These benefits generally include collision and comprehensive benefits if the credit card is used to rent the car and the collision damage waiver is refused on the rental car agreement. Credit card benefits do not cover personal injuries. If you decide to use your credit card make sure you know the limitations.

Rental car insurance waivers can be refused if you are fully covered under automobile, homeowner, life, health and/or umbrella insurance policies. Deductibles will still apply and coverage is limited to personal travel and travel within the United States. International travel requires car renters to purchase insurance through the rental car agency since most personal automobile policies are valid only in the United States.