Do I Need to Purchase the Additional Insurance Offered by the Rental Company When I Rent a Car?

by Katie P.
(Glen Allen, VA)

Generally you do not need to purchase the additional insurance; your own personal automobile insurance policy will cover a non-owned vehicle if you are driving it with the owner’s permission and it is not furnished for your regular use. Just be sure that your name is on the contract and that anyone else who drives it is listed on the contract as an additional driver.


The rental company’s coverage, usually called CDW or collision damage waiver, is really only an agreement for the rental company to let you out of paying your deductible if you have an accident while driving the rental vehicle and it is your fault. Your own personal automobile insurance policy is obligated to pay for the damage to the rental vehicle whether you have purchased the CDW or not under your collision or comprehensive (other-than-collision) coverage. If you only plan to have the rental car for a few days and you carry high deductibles on your insurance policy, it might be worth it to purchase the CDW, but again you are not obligated to. If you are going to be in the rental vehicle for an extended period, the cost of the CDW could wind up being more than your deductible would have been.

If you cause an accident and another person suffers a personal injury because of your negligence, that person’s bodily injury claim will be made against your personal automobile insurance policy.

On a side note, most states require someone selling insurance to have a sales license to do so. Chances are that the person writing up your contract at the local car rental office does not have that license.

This article is approved for informational purposes and is not intended to take the place of competent local legal counsel.

Comments for Do I Need to Purchase the Additional Insurance Offered by the Rental Company When I Rent a Car?

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Jun 15, 2011
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Buying Rental Car Insurance While Renting In a Different Country
by: T. Renfro

You are right about not needing to buy the additional automobile insurance when renting a vehicle, at least when you live in the US and are renting a vehicle to drive in the US. However, if you are traveling in a different country, or have moved to a different country, your US automobile insurance will usually not follow you. You should read your policy or call your insurance agent if you think that your case might be the exception to this rule. You will need to check into the financial responsibility (insurance) laws of the country you will be renting a vehicle and driving in, and abide by those laws. (If you are using a good travel agent, he or she will be able to look into that for you.)

May 27, 2011
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Good Info To Have
by: Anonymous

Thanks for letting me know this. I always wonder when I rent a car whether I should buy this or not. Now I'll save $$!

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