Car Rental Insurance
Below is a list of varying types of insurance options that will likely be offered through the rental company when renting a cheap rental car.
Collision Damage Waiver (CDW)
This is an optional insurance charge that acts as a guarantee that the rental company will pay for any damage to the rental car, subject to a deductible. By declining a CDW, you accept full responsibility for all the damages inflicted on the car. A CDW does not cover personal injuries or damages to personal property. It is possible that your personal auto insurance or business insurance will cover you and the car, so it is a good idea to check with your insurance agent before purchasing the CDW coverage. Some credit card companies and motor clubs offer free rental protection when you use their cards to pay for the rental, but check to confirm what kind of coverage they provide. Note that it is also possible for some CDWs to revoke coverage under certain circumstances. For example, you may not be covered if you are guilty of driving in a negligent manner, on unpaved roads, out of state, under the influence of alcohol or if a non-authorized driver was using the rental car.
Personal Accident Insurance
This costs about $3 per day and will cover a portion of your medical bills should you be hurt in an accident.
Personal Effects Coverage
This will protect your personal belongings against damage.
Loss Damage Waiver (LDW)
Loss Damage Waiver is similar to CDW. Check with the car rental agency first.
Supplemental Liability Insurance (SLI)
Supplemental Liability Insurance usually pays over and above what your personal or business insurance covers. If you do not already have personal liability coverage you could purchase the rental agency's option.
Personal Accident Insurance (PAI)
Personal Accident Insurance provides a one-time payment for you or an accompanying passenger in case of death or injury from a car accident. This is generally covered under your own auto or health policies.
Questions about Insurance
The best way to answer your questions about car rental insurance is to check with your credit card company, personal and auto insurance carrier, and the rental car company itself. Be advised that you should not feel pressured to buy the rental company's insurance. Take the time to check your own existing policy first. Note that there could be certain restrictions to your own policy and that certain rental vehicles might not be covered.
Can I Transfer My Own Insurance Policy?
If you already own a car and are paying auto insurance, then check with your policy to see what is transferable. Again, do the same if you have homeowner's, renter's or health insurance. What insurance carriers deem transferrable will be different with every company. Once again, check your own policies with your insurance agent.