Most car rental companies offer a variety of insurance coverages including coverage against damages to the vehicle, its occupants and third parties.
The most commonly available insurance coverage for car rentals are:
- Loss Damage Waiver (LDW) also known as Collision Damage Waiver (CDW): This coverage typically waives financial responsibility if the rental car is damaged or stolen. It also covers loss-of-use charges while the rental is in the shop, towing charges, and related fees.
If you already have comprehensive and collision coverage on your own car insurance policy, the value of your rental car is likely covered even in the event of a total loss. You'll only be responsible for the deductible, plus any added fees imposed by the rental company.
- Additional Liability Insurance (ALI) also known as Liability Coverage: This coverage protects against potential lawsuits should the authorized driver, while behind the wheel, injure someone or cause damage to someone else´s property.
In the United States, Liability Coverage is mandatory in 49 states (exception: New Hampshire) but the coverage limit itself will vary by state. Check each state’s minimum required limit here and avoid inconveniences during your trip.
- Personal Effects Coverage (PEC): This coverage insures any personal items kept in the rental vehicle.
If you have homeowner’s insurance, renter’s insurance or condo policy, your personal items will generally be covered even if they are stolen from a rental car. You should, however, always review your policy documents in order to be sure of what it covers before you elect or decline this coverage.
- Personal Accident Insurance (PAI): Personal Accident Insurance helps you handle the medical and out-of-pocket costs that add up after an accidental injury. This may include emergency treatment, hospital stays and medical exams, as well as other expenses you may face.
If your personal health insurance already covers accidents, then you most likely won´t need to purchase this coverage at the rental location. You should, however, always review your policy documents in order to be sure of what it covers before you elect or decline this coverage.
Optional coverages can be added to your reservation during the booking process or directly over the rental counter. It’s important, however, to stress that the inclusion of any additional coverages offered over-the-counter is entirely up to you.
In your Booking Confirmation Voucher you’ll find a complete description of all the insurance coverages included in your hired service package. When picking up your vehicle, make sure to have understood the rental conditions as well as the details of what you will be charged for before signing the rental agreement.
Should you suffer any mishaps while enjoying your rental car, you should always follow the procedures established by the rental company for such cases. Common practices include, presenting an incident report/police report and filling in the rental company’s accident form within 24h of the incident, amongst others. This information is readily available at the rental location as well as in the rental agreement itself.