Do I need rental car insurance?

You're at the car rental desk about to get a car for travel. Or maybe you just need one because your car's being repaired. Everything seems to be moving along. Then the agent asks that "Do you want insurance?" question. If you're like a lot of people, the question hits you like a brick of anxiety. If you don't get it and something happens, you could be in big trouble. But if you pay all that extra money and nothing happens, you may feel like you've been duped.

And like many, you probably won't spend the time reading the insurance document to try to understand everything that is and isn't covered. You just want your car. So, what's actually covered? And do you already have coverage? Unfortunately, you may not find out until something goes wrong.

Some folks believe it's better to be safe than sorry, and that's OK. But if you've already got car insurance on your everyday vehicle, you might wonder whether you need the additional coverage — or if you'd just pay extra for coverage you may already have through your regular auto policy.

Instead of waiting until you're at the rental agency desk — or on the side of the road waiting for a tow truck — it's smart to figure out the details of your existing coverage and options before you decide on rental car insurance. Here are a few things to consider:

Options for rental car coverage

When you rent a car, the rental agency may offer a few different types of coverage for you to choose from. Some of these options can include:

• Loss damage waiver or collision damage waiver, or LDW/CDW: A collision or loss damage waiver protects you from paying for your rental car if it's damaged or stolen. Did you know rental companies can charge customers for a car that can't be used because it's in the shop? It's called a loss of use fee.
  
  It's important to note that an LDW/CDW may become void if the driver is speeding or intoxicated or if driving on unpaved roads caused the damage or accident. Hopefully you're not driving while intoxicated, but speeding can happen simply because you missed that one tiny sign noting a drop in the speed limit.
• Liability insurance: Liability coverage can help protect you financially by helping with the costs if you injure someone or cause property damage while driving a rental car. You're probably aware that liability insurance is the minimum coverage required in most states, so you know it's important.
• Personal accident insurance: Rental car companies often offer insurance for medical expenses related to an auto accident. For many drivers, these needs are already covered by their health insurance or a personal injury protection policy.
• Personal effects coverage: If your stuff is stolen from a rental car, personal effects coverage can help pay to replace them. Some things that may have limited coverage include jewelry, musical instruments, smartwatches, guns and cameras. Be sure to review any coverage limits that the policy has.

Note: if you have valuable property that's worth more than your underlying coverage limits on your auto, homeowners or renters insurance, it may be smart to get additional insurance that covers your personal property or valuables.

These can all be helpful coverages, and many drivers feel the peace of mind they offer is worth the expense. The real question is, are you already paying for those protections through your existing insurance coverage?

Does my car insurance cover a rental car?

Whether you're covered — and for what and how much — depends on what types of personal auto insurance you carry and where you're renting the car.

Before you rent, call your auto insurance provider, so you know what terms apply to a rental vehicle. This can help you get the protection you want without paying for duplicate coverage.

Generally speaking, coverage from your primary auto insurance will also extend to a rental vehicle. Here are a few coverage examples to consider:

• Liability coverage — If you cause an accident while driving a rental car, your liability coverage would pay up to the policy limits for the damages to other cars or property. Depending on how much liability insurance you carry, you may choose to skip the extra liability coverage from the rental car agency. But you may want to purchase a smaller amount of coverage to supplement what you already have.
• Collison coverage — Collision coverage on your regular policy would pay for accident-related damages to the rental car. With collision coverage, you may not need to purchase a CDW.
• Comprehensive coverage — Your comprehensive coverage would take care of damages to the rental vehicle not related to a traffic accident, such as theft or vandalism. If you have sufficient comprehensive coverage, you may not need an LDW.
• If you have a homeowners or renters policy, you may also have coverage for your personal belongings if they're stolen from a rental vehicle. That means you wouldn't have to pay for personal effects coverage.

That said, having collision and comprehensive coverage on your regular vehicle may not protect you from every charge the rental company could impose. It's up to you to read the fine print of your rental agreement and understand the risks before you drive the car off the lot. It can feel like a hassle, but it's better to know what you're getting upfront.

Keep in mind that some auto policies won't cover a rental car if you're traveling on business. In that case, you or your employer may need commercial coverage.

Should I get rental car insurance if my credit card offers coverage?

Another coverage option you may not be aware of is from your credit card. Believe it or not, many credit cards come with rental car insurance as a benefit, which can supplement your regular auto insurance policy.

For example, when you use a USAA credit card to reserve and pay for a rental car, you can get built-in auto rental coverage for physical damage or theft.‍ ‍ ^{See note 1} Even towing and loss-of-use charges are covered. And that coverage is good for up to 31 days, around the world.

Primary versus secondary coverage

Some credit cards offer primary coverage, which means you don't have to make a claim on your regular auto policy. Since making a claim can lead to increased premiums, it may help save you money in the long run if you do get in an accident.

Other cards offer secondary coverage. In that case, you'd still have to make a claim with your auto insurer, and the coverage from your credit card could help pay your deductible or other potential claim costs.

Coverage will vary from card to card. Check with your provider to learn more about what benefits are available to you.

Get exclusive discounts and better protection with USAA.

Speaking of benefits, you may be able to save even more when renting a car as a USAA member.

If you rent a vehicle using USAA Perks®, you'll get exclusive discounts on car rentals and other services. Also, rental company fees for administrative, loss of use and loss of value that aren't covered by your insurance may be waived.

If you don't book your car through the USAA rental program, you can still get extra protection through your USAA auto policy and credit card. But you'll need to decline the car rental coverage offered by the rental company to be covered by your credit card benefits. Your card would then offer secondary coverage to your auto policy.

Decline or not to decline? That is the question.

Ultimately, the decision to purchase or decline extra coverage is up to you. But when you know what you already have working for you through your existing auto policy or credit card, you'll be able to avoid unnecessary charges.