Rental Company Insurance vs. Travel Insurance When Renting a Car: What Each One Covers

The insurance offered by the car rental company and your travel insurance don't cover the same thing: the first protects the vehicle (collisions, theft, glass), while the second protects people (accidents, hospitalization, evacuation). The most common mistake travelers make is assuming one replaces the other, and finding out at the airport counter that the rental company holds between 500 and 2,000 USD as a deposit on the credit card as a guarantee for the deductible (excess) for the duration of the rental.

In this article we compare point by point what the basic insurance (CDW/LDW) sold by the rental company includes, what a travel or assistance insurance policy like Assist-365 normally covers, and why intermediate products exist -- like the ones compared by DiscoverCars -- designed exclusively to eliminate that deposit or deductible without paying the rental company's CDW, which usually costs between 15 and 30 USD per day.

What the rental company's insurance (CDW/LDW) really covers

The Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) offered by the rental company at the counter isn't technically insurance: it's a contractual waiver by the company of charging you the full cost of the vehicle if it's damaged, in exchange for you assuming a deductible (excess) that can range from 800 to 2,500 USD depending on the country and the car category.

• Covers damage to the vehicle from collision, vandalism, or theft of the entire car.
• Almost never covers tires, windshield, the vehicle's roof, or the interior.
• Doesn't cover your medical expenses or those of your companions in case of an accident.
• Doesn't cover lost luggage, trip cancellation, or medical assistance abroad.

What your travel insurance covers (and does NOT cover on the car)

Comprehensive travel or assistance insurance, like Assist-365's plans, is designed to protect the person, not the vehicle. If you have an accident driving a rental car, your assistance plan can cover medical care, hospitalization, and even medical evacuation if the injury is serious, with a network of providers in more than 200 countries. What almost no travel insurance covers is the vehicle's deductible or deposit that the rental company holds: that belongs to the world of car insurance, not traveler assistance.

Here's the real gap: if you crash the car, your travel insurance takes care of you, but the rental company will still charge (or hold) the vehicle's deductible. To close that gap, excess/deposit insurance for rental cars exists, which you can compare and buy separately, for example through comparison sites like DiscoverCars, which shows the car's price already including or excluding this additional protection.

Comparison: rental company's CDW vs excess insurance vs travel insurance

The following table summarizes what each product resolves, so you don't pay twice for the same thing or end up without coverage where it really matters.

Does a credit card replace either of the two?

Some premium credit cards include rental vehicle damage coverage as a benefit (secondary or primary CDW), but they almost always require you to have declined the rental company's CDW and to pay for the entire rental with that card. Even so, that card coverage never includes medical assistance, evacuation, or illness-related expenses, which still depend on your travel insurance. Before relying solely on the card's benefit, check the coverage certificate: many exclude specific countries, large trucks/SUVs, or rentals longer than 30-45 consecutive days.

Practical recommendation before picking up the car

The most efficient approach for most travelers is to separate the two risks: buy comprehensive travel insurance (ideally with a discount code like MEDALLOADV2023 at Assist-365) for medical care, hospitalization, and evacuation, and separately compare the cost of the car with and without excess protection on a site like DiscoverCars. Photograph the vehicle inside and out before leaving the parking lot: it's the simplest way to avoid unjustified charges when returning it.

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Rental company's CDW vs excess insurance vs travel insurance

Product	What it covers	What it does NOT cover	Typical cost
Rental company's CDW/LDW	Damage or theft of the vehicle, with a reduced deductible	Medical expenses, tires/windshield, luggage	15-30 USD/day
Excess insurance (DiscoverCars type)	Reimburses the deductible charged by the rental company if there's damage	Medical care, hospitalization, evacuation	Approx. 5-10 USD/day
Travel/assistance insurance (Assist-365)	Medical care, hospitalization, evacuation from the accident	The vehicle's deductible or damage itself	Depends on plan and trip duration

Frequently Asked Questions

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