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Crash course in rental car insurance

Summer is here and with it the accompanying travel season. As tens of millions of Americans set off on their vacations, CONRAD INSURANCE offers insight on rental car insurance.


Rental car companies offer collision damage waivers. There are a lot of misconceptions about what a CDW covers compared to a personal auto policy or a credit card company’s rental car insurance.


Q. Does my personal auto policy extend coverage to a rental vehicle?

A. Most auto policies will pay for actual repairs to a rental car. The policyholder will remain responsible for the deductible – and for any additional items included in the rental car agreement. Personal auto policies without comprehensive or collision coverage will not cover a stolen or damaged rental car.


Q. Is it true that my credit card company will provide insurance coverage for vehicle rentals?

A. Many, but not all, credit card companies offer rental insurance and will pay for damage to a car if you pay for the rental with that card. A credit card company’s coverage is secondary to your personal auto policy, which means it may pick up whatever your personal auto insurer does not pay – such as your deductible.


Q. If I have a personal auto policy and credit card coverage, am I fully covered?

A. While these may provide sufficient coverage in many situations, they will not cover costs and fees such as towing, loss of use (the period of time the rental car is out of service due to repairs), diminished value and administrative fees tacked on by a rental car company. The renter is always responsible for any loss or damage to a rental vehicle, regardless of who is at fault.


In the end, deciding whether or not to purchase a CDW depends on the coverage included with your existing policy and through your credit card company. Call your insurance agent and credit card company to understand what you already have and where gaps may exist. And if your current agent is on vacation, call us!

Drive safely!


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