Car Rental Insurance

Car rental insurance is the most sophisticated part of renting a car and a major source of income for the car hire companies, therefore you should study your rental contract carefully and consider several possible ways to avoid unnecessary payments:

Check your credit card insurance (travel insurance). Depending on the type of your payment card you are likely to have some sort of Collision Damage Waiver (CDW), with either primary (business cards) or secondary coverage.
Check your Personal Insurance Policy (PIP). Especially if you both live and rent the car within US & Canada, you are probably covered for Third Party Liability and don't need any additional insurance. However, there are significant differences between the individual US states (and Canadian provinces) in terms of minimum required coverage which you should check before deciding whether your PIP is sufficient.
Your domestic insurance may or may not be valid in the country where you rent your car. This again is only possible by studying you insurance policy - if you don't fully understand it, contact your insurance agent.

Americans renting for pleasure within US & Canada are usually covered by their PIP, while those renting for business are likely to be covered by their employers' insurance policy. It is important to read carefully your employers' insurance contract - as a rule, there are many provisions that limit the cases when you are insured (like any use of the rented car for non-business purpose).

There are also people who prefer the car rental insurance over their personal insurances simply because they don't want to deal with all the paper-work on their own. This surely is an option - it depends on whether you have more money or time.

Main Car Insurance Terms:

CDW - Collision Damage Waiver. An insurance product usually covering damage caused by collision but not including the most fragile part of the car: windshield, tires, and roof.
Super CDW - Is a Collision Damage Waiver with no deductible.
DAW - Damage Excess Waiver, another car insurance product covering the deductible (excess).
LDW - Loss Damage Waiver. Similar to CDW but broader. Normally includes damage by vandalism and theft, but this is not always the case.
PAI - Personal Accident Insurance. Covers expenses of medical treatment of all the passengers traveling in an insured car.
PEC - Personal Effects Coverage. Insurance product covering theft of personal items from the rented car. Same as PEP.
PEP - Personal Effects Protection. Covers items stolen from the hired car. Same as PEC.
SLI - Supplemental Liability Insurance. Secondary insurance product that covers excess liability expenses, usually up to $1 mil.
Deductible - is part of damage you cover from your own money. It means if the damage is, say, $2,000 and your deductible $1,000 you pay $1,000 and the insurance company another $1,000. There are several insurance products covering the deductible.
Third Party Liability - this is normally obligatory. In many countries TPL is a part of car rental price, in North America customers are responsible for their TPL. Third party liability is covering damage you cause to other persons in case of an accident. The TPL you buy can be very low, sometimes as little as $10,000 which would mean you are liable for anything over this sum. It is advisable to be insured for several hundred thousands USD.
Theft Coverage - is sometimes included in other insurance products but often it is not. Check on TC before renting.
Loss of Use - the lost revenues of car rental agency (while the vehicle is being repaired) caused by an accident of the client.

Car Rental Insurance

Main Car Insurance Terms:

Credit Card Insurance

Car Rental Insurance in Countries

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