What is rental car insurance and how does it work?

Rental car insurance pays for damage to, or theft of, a car you've rented. You can buy it from the rental company, a credit card provider, a travel insurer or a specialist like RentalCover. Cover, price and excess vary a lot between them.

At a glance

• CDW: the Collision Damage Waiver comes with most rentals, but you usually pay a high excess if you claim.
• Extras at the desk: rental companies often sell Super CDW or other add-ons to reduce that excess. These can cost $19 to $37 a day.
• Standalone cover: you can buy it before you travel, often for less. RentalCover costs up to 50% less than the rental desk† and has $0 excess.
• Before you go: check what your credit card or travel insurance covers, and what they leave out.

Rental car insurance covers the cost if your rental car is damaged or stolen. If something happens, you pay an amount called the excess (known as the deductible in the US). The insurer pays the rest. If the repair costs less than your excess, you pay the full bill.

Cover levels differ by provider and by country. Check the terms for where you're travelling, or see our rental car guides for specific destinations.

A Collision Damage Waiver (CDW), also called a Loss Damage Waiver (LDW), is an agreement that reduces what you owe if your rental car is damaged. Strictly speaking, it isn't insurance. It moves the risk of financial loss from you to the rental company.

Rental companies usually offer CDW at the pick-up desk, and staff may push hard for you to buy it. It typically comes with a high excess, so you can still face high out-of-pocket costs. Coverage may also be limited in some areas.

A typical CDW from a rental company or credit card covers:

• Single-vehicle accidents
• Theft or loss
• Scratches and bumps to the main body of the car

RentalCover is an alternative to buying CDW at the desk. We cost up to 50% less than rental companies†, and you pay $0 excess. We also cover:

• Multi-vehicle accidents
• Fire, theft and vandalism
• Towing
• Lockouts
• Car keys
• Windscreens
• Headlights
• Tyres
• Underbody damage

Super Collision Damage Waiver (SCDW)

Super CDW (also called Super Loss Damage Waiver) is an add-on sold by rental companies, usually at the desk. It's a more premium version of CDW that usually reduces your excess to zero.

You may still pay extra fees for towing and loss of use, and it often excludes things like tyres and windscreens. It isn't always good value. RentalCover offers a cheaper option with $0 excess if you have an accident.

Personal Accident Insurance (PAI)

Personal Accident Insurance (PAI), also called Personal Accident Coverage, pays for medical costs, emergency care and accidental death for the driver and passengers during your trip. Rental companies most commonly offer it. RentalCover doesn't include PAI.

Personal Effects Insurance (PEI)

Personal Effects Insurance (PEI), also called Personal Effects Coverage, covers belongings like clothes, electronics and jewellery if they're damaged or stolen from your rental car. You can often buy it from your rental company. RentalCover doesn't include PEI.

Supplemental Liability Insurance (SLI)

Supplemental Liability Insurance (SLI) covers injuries to other drivers and their vehicles. In the US and Canada, the base rental price may include some third party liability cover, and SLI adds more.

SLI is usually a separate policy. Your rental company may offer it, and you can also buy it from RentalCover when you rent in Canada or the US. [Confirm: does RentalCover sell SLI, or is it only included?]

Rental companies: you'll usually be offered CDW, SCDW and PAI at the desk, and staff may push you to buy. Compare other options before you get there. If you've bought RentalCover, you can decline their CDW.

Credit cards: cover is usually secondary, so you claim from any other insurance first. That can leave you out of pocket for a long time. Check your card's terms for exclusions.

Travel insurers: some policies include rental car cover, but often with exclusions and a cap that may be lower than the rental company's charges. Claims can mean long waits while you're out of pocket.

RentalCover: we're a specialist rental car insurance provider. There are no hidden fees and no claim fees. You can claim through our easy online process, and we pay 98% of claims within 3 days.

Which rental car insurance is best?

For many renters, a specialist provider like RentalCover is the best fit. You pay up to 50% less† than at the rental desk, you pay $0 excess if you claim, and we cover things rental companies and other insurers often exclude, from multi-vehicle accidents to underbody damage.

Skip the hard sell at the desk, and don't settle for limited cover through a credit card or travel insurer. Get a quote today and see what you'd pay.

RentalCover offers high-quality cover that costs less and covers more than rental companies. We cover events that rental companies and other insurers often exclude.

Our cover costs up to 50% less† than rental companies, and you pay no excess if you claim. Get a quote today and see how you can enjoy your next rental with more confidence.

Hear from our rental car insurance expert

"Car rental insurance can feel complex, but once you understand the key concepts, it becomes much easier to find the best coverage for you. Consider a policy like RentalCover, allowing you to reject your rental company's CDW and benefit from a policy that's more comprehensive and 50% cheaper†."