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What Insurance do I Need When I Rent a car?

What Insurance do I Need When I Rent a car? You do not necessarily need your personal auto insurance policy to rent a car.

Rental companies usually have minimal auto insurance coverage on their vehicles, so if you get into an accident, you could be responsible for some minor expenses because your personal auto insurance policy will not cover your rented car.

Rental car insurance is not the same as the regular auto insurance, though slightly related, their policies can cover  the same perils but on a different terms and conditions.

When you go to a car rental’s shop to rent a car, you will be informed by the sales rep at the counter about the possible consequences of damaging the car.

So to be on a safer side, if you want to rent a car, buy additional insurance cover from the rental car company, or get a standalone policy through a third party.

This way, you will be sure that you are covered from any potential damage.

On a normal, when you go to rent a car, the rental company will give you terms and conditions which you must follow.

When the car get spoilt outside those terms and conditions then you will pay for the damages.  

Types of rental car insurance

What Insurance do I Need When I Rent a car? -Basically, there are three rentals car insurance cover you would need if you want to rent a car. 

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In most countries, every rental car needs a basic package of three types of cover, but how you get them varies.

If you’re living in Nigeria, all three types of rental insurance will be included in the price you will pay to the rental company when you book the car.

But If you live in the USA or other countries where credit card works perfectly, then you might have the option of using the damage and theft cover provided by your credit card.

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Note: This kind of cover isn’t technically insurance. It’s a waiver, which means the company waives its right to make you pay for damage.

Find out what  insurance you need when you rent a car.

Before getting rental car insurance, you should be aware of your options. The most common types of rental car insurance include:

Damage waiver (DW) or Collision Damage Waiver(CDW)

Collision Damage Waiver will only protects you if the car’s bodywork gets damaged. In such case, the most you would have to pay is an amount called the ‘excess’ or ‘deductible’ as the USA called it.

Collision Damage Waiver does not cover every part of the rented car. It covers the car’s bodyworks only.


So if there’s any damage to the interior, then you would, you’ll have to pay the full cost of fixing the damage except in any situation where you have an additional cover.

Note: Any insurance cover your rental car has will only work if you stick to the rules and regulations of the rental company, which you must sign before you will be allowed to pick up the car.

So let’s assume the bodywork of the car gets damaged while you were illegally parked or on a high speed. Or let’s say you are drunk and driving and the car gets crashed, your Collision Damage Waiver won’t protect you, and you will be liable for the whole amount.

Los or Theft Protection

You need Los or theft protection insurance coverage when you rent a car. Theft Protection means you won’t have to pay for a new car if the rental car gets stolen. This type of car rental insurance also covers damage done to the car if someone tries to steal it.

Theft Protection works if you stick to the rules of the rental agreement. If someone takes the car when you’ve left the keys in the ignition, or it’s stolen from an area where you were not cleared to drive in, Theft Protection will not  cover you, in this case you will be responsible for the full pay of the vehicle.

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Third-Party Liability or Supplemental liability protection.

This applies only when you hurt anyone or damage another person’s property with your rented car. Third-party liability does not cover the rented car rather, it covers another person’s car that may be damaged by the rented car .

Third-Party Liability pays out only the specified amount in the paper work before you pick up the car. This amount usually varies depending on the rental companies. You can always make enquiries to find out more in the paperwork before you pick up your rental car.

Note: Third-Party Liability will only work if you stick to the rules of the rental agreement. If you damage someone’s property while driving on a wrong lane, third-Party Liability won’t cover you, and you will have to pay the rental company for the damage on their and as well pay for damages done to third-party’s property.

Personal accident protection

Third-Party Liability also covers Personal accident protection. It covers medical costs for your passengers if you are involved in an accident. Again, if you have personal injury protection or medical payments coverage under your existing policy, you may already be covered.

How Much does Rental Car Insurance Cost?

What Insurance do I Need When I Rent a car?
What Insurance do I Need When I Rent a car?

What Insurance do I Need When I Rent a car? Rental car companies may offer different types of auto insurance coverage, including collision, personal property, and liability coverage as mentioned above.

So the question is, do you need to buy insurance from a rental car company if you have a personal auto insurance policy, or if you have coverage through your credit card? The next question you should ask yourself is what Insurance do I Need When I Rent a car?

Without question, your rental car needs coverage for damage, theft, and liability – otherwise, you could end up paying out of pocket. However, understanding your options and what makes the most sense for you can be challenging. 

If you need to buy Third-Party Liability, Collision Damage Waiver, and Theft Protection from the rental company when you pick up your car, it’ll cost you between N10,000 to N50,000 per day here in Nigeria.

The amount will depend on the car hire company, where you’re hiring, the length of your rental, and the type of car you’re driving.

I hope this article on What Insurance do I Need When I Rent a car? is helpful. If you have any question or contribution, kindly drop it on the comment box below.

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