Rental car insurance is extremely important to have if you are planning on renting a car. It will provide you with protection from financial liability if you are involved in any kind of collision or accident while driving the rented car.

Just because you are driving somebody else’s car, that doesn’t mean that you won’t be held liable if you are in an accident while driving said car. Furthermore, you should not assume that the rental company’s insurance policy will cover you if you are in an accident while driving their vehicle. You should also be aware that there is a definite difference between rental car reimbursement (which pays for a rental car while your car is being repaired) and rental car insurance.

Here are some different forms of coverage that are often offered through rental car agencies:

1. Liability Coverage
2. Loss Damage Waver and Collision Damage Waiver (LDW and CDW)
3. Personal Accident Insurance (PAI)
4. Personal Affects Coverage

Some of these options may already be covered by your own policy; however, you should always be certain that your policy covers these items, rather than assume so, before driving a rental car. Many policies will only cover vehicles that are owned by you or named specifically in your policy.

You may also want to consider purchasing a personal effects coverage plan. If you are driving a rental car and your personal property is stolen from the vehicle, then you may not receive compensation unless you carry this plan.

Credit card companies also have special offers for rental insurance from time to time, although this insurance usually only covers theft and collision coverage. If you are in doubt about what kind of insurance you need in order to be fully protected, never hesitate to ask your insurance provider or agent.

Rental car insurance may cost you anywhere up to $20 a day. How much you end up paying will depend on which agency you choose and the kind of coverage you decide to buy.

As with other forms of insurance, rental car insurance is designed to protect you in the event of collision, theft, damage or injury. You wouldn’t drive your own car on the roads without being properly insured. The same should go for when you drive a rental car. It’s simple—driving without insurance means taking a risky gamble with your finances. If you are in an accident, and are not covered, you may end up having to pay for damages and injuries out of pocket. For many people this can be tantamount to financial ruin.