The cost of renting a car is different in every state because of varying state regulations regarding insurance coverage. However, renters can typically choose the kind of insurance coverage they want to buy.

Kinds of Rental Insurance

Loss Damage Waiver or LDW: Outside of the United States, the LDW is also referred to as collision damage waiver. While it’s not technically an insurance product, a LDW can “waive” the consumer from financial obligations for a damaged or stolen rental car. Waivers can also cover the “loss of use” a renter incurs from being unable to drive the car while it’s in the shop or replacement arrangements are being made. Towing and administrative fees might also be covered under LDW.

Not Covered under LDW
If the car is damaged or stolen while the renter is speeding, driving on unpaved roads, or driving drunk, waivers may not be applied.

How to use LDW
If you have comprehensive collision coverage on your personal vehicle, you might not need to purchase a loss damage waiver. Check with your provider to ensure you’re not paying for coverage you already have. If you do decide to purchase a LDW, the cost is typically between $9 and $19 per day.

Liability Insurance

While car rental companies are required by law to provide liability insurance, the coverage is typically low. If you have liability on your own vehicle, it might not be worth the money to purchase additional protection from the rental company. Supplemental insurance costs between $7 and $14 per day.

Umbrella Liability Policy

Umbrella policies can be more cost-effective than liability insurance. The umbrella policy is aptly named because this policy hovers above your existing policies to give you added protection while you drive over your car and rental vehicles. Umbrella polices cost as little as $200-$300 per year for coverage up to a million dollars. For each additional million dollars worth of coverage the policy costs $50-$100.

What if I Have NO Personal Insurance
Frequent renters with no personal car insurance policy might consider buying a non-owner liability policy. Non-owner liability policies cover drivers in the event they rent a car or borrow someone else’s car.

Personal Accident Insurance

Personal accident insurance protects you and your passengers against crippling medical and ambulance bills incurred in a car crash. If you have health insurance or have personal injury protection under your own car insurance, you might not need this policy. If you do need this kind of coverage it costs between $1-$5 per day.

Personal Effects Coverage
This coverage insures against theft of items left in your car. If your personal insurance policy includes off-premises theft coverage you’re typically covered if your things are stolen away from home. If you don’t have a personal insurance policy it can cost $1-$4 per day to purchase personal effects coverage.

Tips
Individuals who travel often with prized jewelry, cameras, music gear, or sports equipment might find it more cost-efficient to buy personal effects coverage under their personal insurance coverage. These “floaters” ensure broad coverage and protects the insured against theft from anywhere in the world.

Most states have minimum age requirements for renters. Major rental companies typically state that a renter must 21 or over and sometimes, rental companies refuse to lease a car to someone under the age of 25.

Some rental companies also complete a background check of the renter’s driving record and credit history.

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