I Plan On Renting A Car -
Do I Need To Buy Their Insurance?
There is no single definitive answer to this question so our response is- MAYBE. Several variables need to be taken into account and those variables can and will change with every single scenario.
Let us start by saying that the rental car companies do not actually offer "insurance". Most of the time the employees of the rental car companies are not licensed insurance agents either. What the rental car companies offer is something known as a "Collision Damage Waiver". Collision Damage Waiver (sometimes called CDW, LDW or DW): this is not really insurance but a waiver in which the rental company agrees not to make a claim against you if your rental is stolen or damaged. It usually excludes various conditions, such as driving while impaired or driving outside a defined area or country. These costs can vary significantly. Depending upon the actual cost per day and the number of days the car will be rented, this option could provide inexpensive piece of mind.
Won't my auto policy pay for damages? MAYBE. It depends on numerous factors such as: what coverages you carry on your policy, what your limits are for those coverages, how much damage occurs to the rental vehicle, how much damage occurs to other property, how much bodily injury is sustained by other parties, where the accident happens (within the U.S. or outside the U.S.), who is driving the rented vehicle, did the driver have permission, was the driver impaired, was the driver listed on the rental agreement, is the driver a member of your household or a family member, how did the damage occur to the rented vehicle (wrecked, stolen, vandalism), who was at fault? As you can see, there are way too many variables to offer a simple yes or no response.
Some auto insurance policies in the state of Texas are what is known as limited liability / named driver policies and don't extend coverage to any other vehicle or operator other than those listed specifically on the policy. Most of these policies are issued by non-standard or sub-standard companies. Even if your policy is not one of these "cheap" policies, you may not have the right coverage or enough of it in case the rented vehicle is damaged.
Beyond the actual damages to the rented vehicle you could also be held responsible for other monetary damages due to: loss of rental revenues, diminished value of the rental vehicle, and administrative expenses. Keep in mind that your credit card company may offer some type of coverage/wavier if you use their credit card when renting a vehicle. Each credit card company will have their own limits and exclusions that will apply for their own clients.
In conclusion, you will need to make the decision that you will be the most comfortable with. I (James Brown) have rented vehicles and at times have purchased the CDW and other times I have not.