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Do I need to pay for insurance when I rent a car?

Auto Insurance Basics
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If you have an automobile policy that includes third-party liability, collision, and comprehensive coverages, you can probably decline all coverage offered by a rental car company. Check your policy to be sure, however, especially if you rent frequently.

Your own comprehensive and collision coverage should pay for damages to the rental car. You'll still be responsible for your deductibles. If you aren't carrying collision and comprehensive insurance, however, you should probably purchase the loss or collision damage waiver offered by the rental car company. Without it, you could end up buying them a new car.

Similarly, your automobile insurance should cover you for third-party damages resulting from your rental. If you have no liability coverage (usually this means that you have no automobile insurance), you should consider the liability coverage offered by the rental car company. Where else will the big money required to pay off legal judgments come from?

All other forms of rental car coverage are usually a rip-off. Personal accident insurance is usually just a special-purpose life insurance product, hardly ever a good idea. To cover loss of life, buy life insurance. If your possessions are stolen from the rental car, your homeowner's or renter's insurance should cover the loss.