When it comes to rental car insurance, knowledge is power.

You don’t want to spend good money to duplicate coverage you may already have. And likewise, you don’t want to skip out on a critical piece of coverage because you think you have it — and you don’t.

Learning the different car rental insurance products is key to getting the optimal coverage, whether you’re taking a cross-country road trip in rented wheels or simply need to get form the airport to the convention center and hotel — and then back again.

Here are key terms to know, and to understand as they relate to one another:

• Collision Damage Waiver: If you’ve been to a car insurance rental counter, odds are someone has tried to sell you this product. Folks may tell you that a Collision Damage Waiver (CDW), also known as Loss-Damage Waiver, isn’t in fact considered car insurance at all. And they’re right. It’s really providing coverage against rental car damage and liability, which are already likely covered by your personal auto insurance policy (if you have one.) However, if something were to go awry with your rental, you would likely still on the line for fees such as towing and “loss of use,” which is a fancy way of describing the revenue a car insurance company loses when one of its vehicles is no longer on the road.¹ There is also something called “diminished value,” which is the difference in resale value before and after an accident. Car insurance companies may tag you with a charge for as much as $7,000 if you don’t have coverage for it. Ouch.² Allianz Global Assistance’s Rental Car Damage Protector is designed as a cost-effective alternative to the standard Collision Damage Waiver.
• Credit Card Rental Protection: The credit card you’re using to pay for your rental car may very well come with some applicable rental car benefits. Of course, you don’t just want to guess this is the case and you’ll want to verify if and how much of a benefit is provided. Often times, the protection can be very basic and limiting. But it’s free, right? Also, be aware that a credit card benefit is often considered secondary coverage, in which case you still need to file a claim with a primary form of rental car insurance.
• Supplemental Liability Insurance: This is designed to increase whatever existing coverage you may have through your personal auto insurance for the unfortunate scenario in which you injure others or damage their possessions in an accident. There is also a Plan B, one that’s recommended by the Insurance Institute of America: buy a low-cost umbrella liability insurance policy through your auto or homeowner’s plan to beef up your rental car insurance, instead.³
• Personal Accident Insurance: Sometimes you have to think about yourself, too. Liability coverage, likely available through your personal auto insurance policy (if you have one), covers harm done to others, including both injuries and property damage. But Personal Accident Insurance exists to provide coverage for you and your passengers, providing coverage for medical and ambulance fees, as well as death benefits.⁴ Note that, if you have health insurance, there will likely be some redundant benefits for you, but not your passengers. And a life insurance policy would serve the same role as the death benefit. One more detail to vet: if your car insurance policy includes personal injury protection, you may also have some duplicate coverage here.⁵
• Personal Effects Coverage: If you’re renting a car and packing light, then you may be able to skip Personal Effects Coverage. But if you’re renting a vehicle for a road trip — and the trunk will be overflowing with gear — or you have a big business presentation and all the A/V equipment to make it happen, then Personal Effects Coverage might be a smart move. That’s because it covers the theft of your person items, up to a fixed amount. Pro tip: if you have renters’ or homeowners’ insurance, be sure to check the “off premises coverage” to see if you have any coverage already available.⁶
• Secondary Coverage: Any insurance policy that may be applied after a claim is made to primary coverage, such as your personal auto insurance or Allianz Global Assistance’s Rental Car Damage Protector, is considered Secondary Coverage. Credit Card Rental Car Insurance is an example of Secondary Coverage, and may be used to pay for fees remaining after your primary insurance has been applied.
• Rental Car Damage Protector: This Allianz Global Assistance product is very carefully designed to be a cost-effective and dependable alternative to car insurance company up-sells. For just $11 per calendar day, Rental Car Damage Protector provides primary coverage for covered collision, loss and damage up to $75,000. It’s valid almost anywhere in the world and comes complete with a 24-hour, multilingual emergency assistance hotline to troubleshoot travel emergencies and inconveniences alike.⁷

The next time you walk up to the rental car counter or visit a rental car company online, you’ll have the knowledge you need to get all the rental car insurance, and peace of mind you need, without overspending or overlooking a key need.

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• The Four Types of Rental Car Insurance, Explained
• Should I Get Rental Car Insurance