I think we have all experienced it at least once in our lives. We touch down in a city for holiday or whatever reason, we go get a rental car and when going through the documentation we stumble when we get to the insurance part. The problem is that almost all of us aren’t sure how to handle the insurance side of things. They use big words and tell of all the possible things that could happen to you. It is almost as though they are just pushing you to the corner and almost forcing you to sign up for every insurance package that they offer. It is quite normal for people to be confused when it comes to rental car insurance. In this article, we hope to educate individuals on how to properly deal with rental car insurance.

In order to full understand rental car insurance, we need to know the different types that are available to us. Below we will list the commonly available coverage types.

CDW (Collision Damage Waiver), LDW (Loss Damage Waiver), PDW (Physical Damage Waiver) It is the most basic of rental car insurance coverage that you need. Basically, if you cause an accident an anything happens to the car, you don’t need to pay for the damage. There are however limitations. The limitations will be set by the policy and are normally things like mileage, distance from city or even if you were caught drunk driving.

LIS (Liability Insurance Supplement) This insurance is in addition to the one above. It will cover any third party that is involved with any accident that happens with the rental car.

PAI (Personal Accident Insurance or Coverage) This coverage is also in addition to whatever is above and covers the passengers and whatever damage or maiming requiring hospitalization.

PEC (Personal Effects Coverage) or Personal Property Insurance This is normally the least opted coverage. It covers whatever items of value that you lose in an accident or from a break-in to your rental car.

The insurance coverage items that we have described to you above are ordered from the most basic at the top to the extras at the bottom. The most basic insurance package that individuals should drive away with are at least a combination of CDWs and LISs. This is the very minimum coverage that we consider safe. Any less and you could be in for a very messy and prolonged case if you do get into an accident.

Another thing note is that if you have comprehensive car insurance for your own car, it might still apply to your rental car. Some comprehensive car insurance products are so “comprehensive” that they even have some coverage options for any rentals that you might have in the same country. This is again, very dependant on the insurer that you have. If you aren’t sure of what options you have, it would certainly be worth your while to give you current insurer a call and see what your policy offers with rental car insurance. That being said, you can’t be too careful. Never assume you are covered unless you check.

Sometimes you might not only be covered by your comprehensive plan but sometimes even your credit card too. This is especially true for higher end “gold” or “platinum” offerings. These cards normally have some sort of personal property protection package built in and as such will already work as an PEC insurance coverage. As with its availability, it will also be very wise to check with your credit card provider. Again it is very dangerous to assume you are already covered.

It is only after you check with both your current car insurance provider and your credit card should you even think of purchasing the rental car insurance from the rental company. Naturally, if you do it the other way around you could very well be wasting money with double coverage. The coverage that you buy at the rental agency could very well overlap the coverage that you already have with your current comprehensive insurance or your credit card.

It should also be noted that if you opt to get insurance from the rental car agency that it will actually cost more than what you can get from your own car insurance company or as provided by the credit card. It isn’t abnormal to find that rental car agencies will charge almost double for the insurance coverage. This is a part of their profit model to catch customers with no insurance so they are forced to get it or not get the rental car.

When it comes to rental car importance, coverage is certainly necessary. However, rental car agency coverage isn’t necessary. It will do you good to check that you aren’t already covered from other sources so you don’t double up on insurance as the rental agencies normally want you to. Check to see what insurance coverage you already have and only buy it from the rental car agencies if you don’t have the coverage and genuinely need it.

You don’t need to be in the dark with rental car insurance any longer.