What Car Insurance Coverage Do I Need?

Decide how much liability coverage is enough for similar type of drivers.

Rental Car Insurance

The simplest way to insure you receive the best car rental insurance is to inform yourself on the types of insurance for rental cars to determine what is best for you and to understand the difference between being insured through your everyday vehicle insurer and purchasing rental car insurance through your credit card.

Rental car insurance safeguards a driver from bringing liable for damages that may occur to the temporary vehicle or injuries that may happen to others or self during the course of the rental car agreement. There are commonly 4 different kinds of coverage that rental car companies sell and that typically cover different things.

Types of Rental Insurance


Type of InsuranceBenefitsCosts
Loss Damage Waiver (LDW) Waives renter's responsibility for damage to or theft of rental car $9 to $19/day
Supplemental Liability Coverage Increases liability coverage to $1 million $7 to $15/day
Personal Accident Insurance Provides medical and accidental death benefits if you are injured or people are killed in the accident $1 to $7/day
Personal Effects Coverage Reimburses for any personal property that is stolen from a rental vehicle $1 to $5/day

All the major rental vehicle companies recommend that customers purchase insurance when they arrive at the pickup counter and in the process of getting the rental car keys in their hands. There are several different kinds of insurance on rental cars but typically the options fall into four major categories. The 4 major types of rental car auto insurance are Loss Damage Waiver, Supplemental Liability Coverage, Personal Accident Insurance, and Personal Effects Coverage.

Loss Damage Waiver (LDW)

The benefits of Loss Damage Waiver (LDW) are that it waives the car renter’s culpability for damages or loss of the rental vehicle via theft. It costs between 9 to 19 dollars a day. LDW is not insurance, however, it is an agreement that takes away the renter’s financial responsibility if the rental car accrues damages in an accident or if the theft of the car occurs. LDW covers any expenses for towing and if the rental car needs to be in a repair shop. You should not get LDW for your rental car coverage if you already have comprehensive or collision coverage as you can use that in place of an LDW. You should get LDW if you don’t have a credit card that allows rental car insurance or you do not have collision and comprehensive coverage of your day-to-day insurance policy.

Supplemental Liability Coverage (SLC)

The benefits of Supplemental Liability Coverage (SLC) are that it will increase your coverage in liability to $1 million and it only costs between 7 and 15 dollars a day. This rental auto insurance is mandatory in every single state. It helps you if an accident happens and protects you from property damage claims and bodily injury that are made against you while you are in operation of the rental vehicle. You must get SLC if you do not otherwise have car insurance, as it is mandatory.

Personal Accident Insurance (PAI)

The benefits of Personal Accident Insurance (PAI) are that it helps with medical costs and accidental fatalities if other people are hurt or killed. It costs 1 dollar to 7 dollars a day. PAI can sometimes cover the customer who rented the car throughout the entire length of the rental. Other people in the car are generally only covered when they are riding in the vehicle. This insurance is not necessary as renters are probably covered under their health insurance policy.

Personal Effects Coverage (PEC)

The benefits of Personal Effects Coverage (PEC) are that it gives you money back for any personal property that is stolen from the rental car. It only costs 1 to 5 dollars a day. PEC only covers up to $2000 worth of items. You should plan on getting PEC if you believe you will leave your personal items in the car. This is also not a necessary plan of rental car insurance.

Buying Auto Insurance from Rental Car Through Your Credit Card and Through Your Insurer

Purchasing rental car insurance through your credit card is relatively simple and straightforward. If you plan on doing so, make sure you are using the same credit card you use for renting the vehicle. Also, the name associated with the credit card should match the person who rented the car. Visa, American Express, and MasterCard are carriers that allow for insurance to go through their services. MasterCard however, only allows for cardholders with Gold, Platinum, World, and World Elite Cards to use their services for car rental insurance. Most credit cards offer free LDW coverage. To insure you qualify, you must decline LDW coverage from your insurance company.

The maximum amount of time each major card will cover is listed below:

  • American Express: 30 days.
  • MasterCard: 21 days for World and World Elite card members, 15 days for other kinds of cardholders.
  • Discover: 31 days.
  • Visa: 15 days in the country of your residence and 31 days outside of that country.

There are also insurance companies that offer rental car insurance coverage that is stand-alone. These policies typically include roadside assistance, primary coverage, and loss damage. These policies must be purchased prior getting used of the rental car. The policy through the insurer is also cheap and typically costs around $10. If for whatever reason, the renter needs to file a claim through the car rental insurance, they would need to contact the insurer directly and provide the necessary information and not call their day-to-day car insurer.

Article rating:

5.0/5.0 (8 user votes)

Add new comment

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Enter your zip code to get insurance quotes in your area

Wrong zip code
Progressive StateFarm Allstate LibertyMutual
Get Free Quotes