How to Avoid Paying for Rental Car Insurance

Car rental companies assume you are going to pay automobile insurance when you rent a car. Some states have insurance as optional while a few states have it built into their costs. Car rental insurance is charged beyond the advertised rate. It's a hidden and costly expense but can be avoided, as described in the following steps.

Difficulty: Easy

Instructions

1. Ask the standard car insurance company if you are covered when you drive a rental car. Quite a few insurance policies do cover car rentals.

2. Check with one of your upper-level credit card companies like American Express or Mastercard Gold to see if they provide insurance coverage when you use their card to rent the vehicle. Make sure the credit card covers all aspects of liability--most do.

3. Rent a larger car and not an economy car because some rental companies offer special rates for larger vehicles that already includes CDW/LDW. All in all, you save more with a larger car than an economy car by not having to pay for daily insurance fees.

Tips & Warnings

• Know before you go. Make sure you have all the insurance criteria figured out before going to the car rental office. This assures there is no second guessing or wrong decisions made because you don't know.
• Purchasing CDW or Loss Damage Wavier releases the rental driver of responsibility of loss or damage to the car to its full value. But read the small print because each rental agency is different.
• CDW and LDW regulations vary from state to state. Read the fine print. You can also check with your travel agent or automobile membership company on each state's car rental insurance criteria.
• It costs anywhere from $10 to $25 extra a day for car rental insurance. That can add up if you are renting a car for a week or more.
• Car rental companies tell you that if you purchase car rental insurance, it can prevent liability of any damage to the rental, assuming you are not guilty of gross negligence.