insurance

Who Pays When You Crash a Rental Car?

If you cause an accident, your auto insurance will generally cover you up to your policy's liability limits in the U.S. or Canada.

I buy the collision damage waiver when I rent a car because I don’t want my insurance company to know if I’m in an accident. What if I hit another vehicle and it’s my fault? --G.T., Albany, N.Y.

The collision damage waiver (CDW) covers damage to the rental car, but it doesn’t cover liability if you injure someone or damage another car or property. The rental car company may automatically provide a small amount of liability coverage. But if it’s not enough, your own auto insurance will generally cover you up to your policy’s liability limits if you rent a car in the U.S. or Canada (but usually not in other countries), says Bill Wilson, an insurance educator and founder of InsuranceCommentary.com, an industry blog. If you don’t want your insurer to cover an accident that’s your fault, you will have to buy supplemental liability coverage from the rental car company in addition to the CDW. For example, Enterprise charges $10 to $15.50 per day for $1 million in coverage.

Many renters turn down the CDW, which can cost $9 to $25 per day, because their own policy covers damage to the rental car and many credit cards pay the deductible. But buying the CDW eliminates the hassle of filing a claim with your insurer (which could lead to a rate hike). It also covers costs your insurer or credit card company may not pay, such as loss of use and diminished value charges.

Most Popular

What Are the Income Tax Brackets for 2022 vs. 2021?
tax brackets

What Are the Income Tax Brackets for 2022 vs. 2021?

Depending on your taxable income, you can end up in one of seven different federal income tax brackets – each with its own marginal tax rate.
September 20, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
19 Best Stocks to Buy Now for High Upside Potential
stocks

19 Best Stocks to Buy Now for High Upside Potential

Finding the best stocks to buy when the market is selling off can be daunting, but the pros believe these 19 top-rated names are poised for big return…
September 23, 2022

Recommended

Short-Term Insurance Plans' Good, Bad and Ugly
retirement

Short-Term Insurance Plans' Good, Bad and Ugly

You'll need a clear-eyed analysis to gauge the value of short-term care insurance plans and if they're right for you.
May 26, 2022
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. But Medicare Advantage has problems, too.
May 4, 2022
3 Paths for Getting Vision Insurance in Retirement
Healthy Living on a Budget

3 Paths for Getting Vision Insurance in Retirement

Medicare Part B's restrictive coverage of vision care means you'll have to find a different route to get the right insurance. Here's some guidance.
May 2, 2022
What to Look for in a Disability Insurance Policy
insurance

What to Look for in a Disability Insurance Policy

Income protection insurance will keep your paycheck working, even when you can’t. Here are five key features of an individual disability insurance pol…
April 12, 2022