Rental Car Insurance

As long as we have full coverage on Blue, and we rent the car with a good credit card, we _do not_ need any extra insurance.

Credit Cards
Working Assets
— Apparently all visa cards (?) have the following policy (but mine does for sure): the Visa card's "collision damage waiver" covers damage to the rental car in the event of an accident. You must use the card for the purchase and must decline the rental agency's damage waiver. Anyone specified as a driver on the rental agreement is covered, even if they're not on the card. It doesn't cover injuries to people, nor any other vehicles involved in the accident. The rental can't be for more than 15 days, and the policy only applies to "normal" rental cars: no trucks, buses, motorcycles, or "exotic" cars (what are those?). visa.com/benefits has these details.

Rental Car Insurance Simplified

To buy a collision damage waiver or not is sometimes a baffling decision for many travelers at the rental car counter. The collision damage waiver (CDW a.k.a. LDW) covers the cost of damages to the rental car if you are involved in an accident. However, it is not insurance — it is simply a provision of your rental agreement that addresses your liability for damages to the car.

So before you shell out the extra cash for this waiver, the Insurance Information Network of California suggests that you follow these guidelines to make the right decision:

CHECK YOUR EXISTING AUTO INSURANCE POLICY

Review your auto insurance policy or call your insurance agent before you rent a car. You don't want to pay extra money for coverage you already have. Most auto insurance policies will provide liability insurance if you injure someone in an accident. However, damages to the rental car are only covered under your policy's comprehensive and collision coverage. Make sure your auto policy includes this type of coverage.

CHECK YOUR CREDIT CARDS

In some cases, your credit card will pay for damages to a rental car in the event of an accident. To be eligible, you probably would have to decline the collision damage waiver as well as charge the full amount of the rental car on your card. Make sure your credit card offers these services. Also make sure you understand all limitations and exclusions your credit card may issue such as limited rental contracts and approved rental dealers.

YOU MAY NEED TO BUY THE CDW

You can safely decline the collision damage waiver if you're absolutely sure your auto insurance or credit card applies. However, buying the collision damage waiver could be the answer for some travelers. Here are the reasons why:

If you aren't covered under your own insurance or credit card then you may consider purchasing the collision damage waiver. It's a better option to pay about $8 to $11 a day than $15,000 to $20,000 to replace the rental car.

The collision damage waiver pays for "loss of use." This is what the rental car company charges you for the money and time it lost since the vehicle could not be rented. Most states do not cover loss of use under an auto insurance policy. The exceptions are: Alaska, Connecticut, Louisiana, Minnesota, North Dakota, New York, Rhode Island and Texas.

If you are involved in an accident, some rental car companies want payment upfront, meaning you'll have to wait to be reimbursed from your own insurance company. This is an expensive price to pay for some travelers, therefore some may just opt to pay the extra price for the collision damage waiver.

There are five parts to a basic insurance policy:
Bodily Injury
Personal Property Liability
Personal Injury Protection
Comprehensive
Uninsured Motorist

Bodily Injury and Personal Property Liability: These areas insure the policyholder against injuries caused to another person or other people's property.

Personal Injury Protection: This coverage pays for both medical expenses and lost wages to the policyholder and any passengers injured in the vehicle in the event of an accident. People with good medical and disability policies might not need to maximize PIP coverage.

Collision and Comprehensive: These coverages can add significant costs to your premium. Collision provides coverage for loss or damage in the event of any kind of accident, whether it's with another car or an object, such as a utility pole or fire hydrant. Comprehensive insurance covers your car in the event of theft or natural disaster.

Uninsured Motorist: As the name indicates, this provides protection from crashes with motorists not carrying car insurance, as well as covering you in the event of a hit-and-run accident.

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