When renting a car, there are many different options available in addition to the basic contract, including rental car insurance. Many of us wonder if those options are necessary and, in fact, the insurance option is required only in Texas. When choosing whether or not to purchase options there are many factors to be considered.



What exactly is covered when opt for insurance on car rentals? Any agency renting out cars will lure you into purchasing the following four types of insurance coverage in this category.

1. Damage caused to car rented: LDW, or in other words, Loss Damage Waiver, could be easily considered the frequently occurring form of car rental insurance among a majority of big rental companies. The insurance covers only the car and nothing else, if it happens to be damaged by the renter, and it does not matter as to how the car was damaged. Let us consider that the car rams into a tree and suffers damage, then the repair costs for the car will be borne by the insurance company. Even when a collision occurs between this car and another car, only the rental car's repair expenses will be met with by the insurance company. This will be reviewed as under, at length under an entirely different heading named "liability coverage".

Smaller car rental agencies offer something called Loss Damage Insurance, known as LDI for short. This works on the same lines as LDW, the difference is just that the fees are collected by a third party.

Most car rental agencies are self-insured and pay monthly contributions to a communal fund that covers the claims for damages. For that reason, LDW is the preferable option because it covers the damages even if the car is damaged beyond repair.

LDW could be total or incomplete. Full Waiver, however with certain differences, is what is available all over America. As for the Partial Waiver, the insurance only takes care of a specific portion.

2. Covering another's property and person: Under this Additional Liability insurance, also known as ALI or Supplemental Liability Insurance (LIS or SLI), the coverage is fixed as a certain dollar value (usually up to 1 million dollars). Under this, any damages caused to other people or to their property, either by you or by a driver authorized to drive you, are covered.

3. Personal Effects: The most cost-saving--and, to me, vital--insurance is called the PEP, or Personal Effects Protection. It's also known as PEC, or Personal Effects Coverage. Losses that are sustained by your and your party, because of accidental damage or burglary, are covered here and restricted to a dollar amount that has been predetermined. The hotel room that you stay in, along with everywhere you go when you travel, is included under this kind of insurance. The insurance cost is generally not even a couple of dollars for each day. What often happens is that, aside from a particular deductible amount, all else is paid in cash up to the limit of the policy, which in most cases is well under $2000.

4. Personal Accident Protection: This is another very affordable and comprehensive policy available for up to just $5 per day. It provides insurance to the driver (and often all of the driver's companions) up to $100,000. The driver him/herself, or the person who appears as the "renter" on the rental contract, is usually additionally insured through the duration of their trip. Visitors to the United States or Americans traveling abroad without personal insurance should seriously consider this protection plan.