For many first-time drivers in the United States,Rental Car InsuranceThis is the most confusing and unsettling part, with so many technical terms and clauses that it's hard to choose which to accept. Basically, US rental car insurance consists of a combination of different coverage items. Without understanding the different types of insurance beforehand, you might end up with insufficient coverage, no one to help you in case of an accident, or be pressured into buying unnecessary insurance at the counter. Therefore, based on years of experience, we've compiled the following FAQs on US rental car insurance most frequently asked by overseas travelers, answering all your questions in one go.
Highlight the finishing touches:
1. What insurance do I need when renting a car in the United States?
Common types of insurance for renting a car in the United States include:
- Collision Damage Waiver (CDW): Covers repair costs for the rental car caused by a collision in a traffic accident.
- Loss Damage Waiver (LDW): In addition to CDW, it provides coverage for theft or total loss of the vehicle.
- Tire and Windshield Protection (TWP): Protects against damage to tires, windshields, and windows.
Most people assume that vehicle damage insurance should cover the entire vehicle; however, many rental companies exclude these two items from their terms and conditions and do not offer additional coverage. Sky Horse is one of the few rental companies that provides coverage for both of these items.
- Liability Insurance Supplement (LIS/LI/SLI, Third-Party Liability Insurance): Supplements the liability for compensation to third parties (other people's vehicles, personal injury, property damage).
- Personal Accident Insurance (PAI): Covers medical and disability expenses for drivers and passengers in the event of an accident.
- Personal Effects Coverage (PEC): Protects passengers from theft or damage to their personal belongings (luggage, electronics, etc.) inside the vehicle.
- Roadside Assistance (RSA): Support for non-accident situations, such as flat tires, towing, dead battery, and keys locked inside the vehicle. (It's not actually covered by insurance, but it's often included as a coverage item.)
The most important of these are collision damage coverage (CDW/LDW) and third-party liability insurance (LIS).These two things can prevent you from incurring high repair costs or legal compensation after an accident.
2. What is the difference between CDW and LDW?
- CDW (Collision Damage Waiver): Collision damage insurance covers repair costs for rental vehicles damaged in an accident.
- LDW (Loss Damage Waiver): Includes CDW, additionally covering vehicle theft.
Simply put, LDW is an enhanced version of CDW, and the price difference is usually not significant. Overseas travelers are advised to choose LDW directly to avoid more risks.
3. Is it necessary to purchase third-party liability insurance? What are the risks of not purchasing it?
It is absolutely necessary.
In the United States, if you cause personal injury or property damage to another party in an accident, you may face hundreds of thousands or even millions of dollars in compensation. Without third-party liability insurance, the driver is liable for all personal injury or property damage caused to the other party.
4. How much does car rental insurance cost per day in the United States?
General market conditions:
- Collision Damage Coverage (CDW/LDW): Approximately US$20–30 per day
- Tire and Window Protection (TWP): Approximately US$5-15 per day
- Third-Party Liability Insurance (LIS/LI): Approximately US$12–30 per day
- Roadside assistance (RSA): Approximately $5-15 per day
- Other supplementary insurance (PAI, PEC): Approximately US$5–10 per day each
However, insurance costs vary by state, rental company, and vehicle model. Most U.S. rental companies do not have a fixed price list and the price will be based on the booking confirmation or payment at the counter.
Sky Horse offers three insurance plans, from basic vehicle damage insurance $ for 12.99, enhanced insurance $ for 24.99, to comprehensive insurance $ for 39.99/day, providing travelers with affordable and comprehensive options.
5. Why is there such a large price difference in car rental insurance in the United States?
The price difference in car rental insurance comes from the following differences:
- Coverage amount: refers to the maximum amount of compensation that an insurance company will provide after an accident.
- Deductible: Some plans have zero deductible, but others require you to pay several hundred to several thousand dollars upfront before the insurance company covers the remainder.
- Items not covered: Most insurance policies do not cover tires, windows, keys, or loss of business operations.
- Claims process: Some claims require the driver to pay upfront and then apply for a claim, while others are handled directly by the rental company.
Sky Horse's comprehensive solution covers the most concerning and likely issues for travelers, including tires, windows, roadside assistance, business losses, and lost or damaged keys. It offers one-stop, fully Chinese-language assistance with accident claims, with no upfront payments, zero deductible, ample coverage limits, and affordable pricing, providing overseas travelers with the most user-friendly and convenient protection.
6. If I have an accident while renting a car in the US, will the insurance company provide full compensation?
It depends on the insurance coverage.
- CDW/LDW: Exempt from liability in most cases, but not for drunk driving, traffic violations, etc.
- LIS: It will compensate third parties for losses according to the insured amount.
- Credit card insurance typically only covers vehicle damage and does not cover third-party liability.
Special attention should be paid to the coverage limit of "third-party liability insurance". Some insurance policies with very low prices may have very small claims. If an accident occurs in the United States, medical expenses can be very high. If the coverage is insufficient, the driver will still have to bear the remaining costs.
7. What insurance coverage is sufficient when renting a car in the United States?
CDW and LDW typically don't have fixed coverage limits; instead, they are differentiated by a "deductible" or "full coverage exemption." Most CDW and LDW policies fully cover vehicle repair or theft costs in the event of an accident. Some policies set a fixed deductible, meaning the traveler must pay a portion of the costs out-of-pocket before the insurance company reimburses any amount exceeding that limit. Sky Horse's enhanced insurance plan ensures the driver bears no liability for any losses.
Third-party liability insurance coverage is recommended to be around $30,000, as medical and property repair costs in the United States are relatively high, and even minor accidents can exceed $1,000 or even $10,000. For example, Sky Horse's third-party liability insurance offers $30,000 per person for bodily injury, with a maximum of $60,000 per person for bodily injury, and $15,000 per person for property damage.
8. What items are not covered by US rental car insurance?
Typical car rental insurance often does not cover:
- tire blowout
- Glass (windshield and car windows)
- Car chassis, roof
- Damaged or lost keys (requires compensation ranging from several hundred yuan).
- Loss of Use (refers to the business loss incurred when a vehicle cannot be rented out while it is under repair)
Many travelers believe that having insurance when renting a car means they don't need to worry about anything. However, it's crucial to carefully read the terms and conditions when choosing insurance to ensure that no specific details are excluded from coverage. Furthermore, some rental car companies' insurance plans have limitations regarding driving areas; for example, they may not cover incidents occurring in sandy or more remote areas.
Sky Horse offers corresponding products for all of the above projects, providing more comprehensive protection.
10. How do I apply for insurance claims in the event of an accident?
- Call 911 to report the incident (an accident report from the police is required).
- Notify the car rental company
- Take photos and collect evidence at the scene.
- Fill out the claim form and provide the policy number and accident report.
Sky Horse's professional team will do its best to assist overseas travelers with the aftermath of an accident.
Extended Reading:US Rental Car Insurance Process and Precautions
11. Is the insurance premium higher when renting a car at the airport?
Insurance premiums are usually fixed. The reason why renting a car at the airport can be more expensive is due to airport surcharges and taxes. However, there are no airport surcharges when renting a car from Sky Horse, as we provide a private car service to and from the terminal.
Extended Reading:Hidden Fees and Money-Saving Tips for Airport Car Pickup
12. Are there differences in car rental insurance regulations between different states?
The differences are generally not significant, but some states mandate certain types of insurance while others do not. For example, California does not mandate the purchase of collision damage insurance, but we strongly recommend that you buy it.
13. If drunk driving or other violations occur, will the insurance still cover the claim?
No. Insurance will refuse to pay for any cases of drunk driving, driving under the influence of drugs (including marijuana), driving without a license, illegal racing, etc. Overseas travelers must pay special attention.
Special attention needs to be paid to "Additional drivingThe section on "..." While it's understandable that fellow travelers might take turns driving, thinking it won't cause any problems, if an "extra driver" isn't included in the insurance policy, the insurance may not cover the driver not covered. An exception might occur if the couple is spouses; some insurance policies cover both partners, so it's best to check with the rental company for details.
14. Can travel insurance in Taiwan (or Asia) replace car rental insurance in the United States?
no.
Travel insurance in Taiwan or Asia typically only covers personal accident and medical expenses. Some may cover medical claims for overseas traffic accidents, but "does not" include vehicle damage or third-party liability insurance for rental cars.
In the United States, without a Collision Damage Waiver (CDW/LDW) and Liability Insurance Supplement (LIS), in the event of an accident, the parties involved will still seek compensation directly from the driver.
However, travel insurance/medical insurance remains very important in the United States because it primarily covers "personal medical care, accidents, and emergency assistance/evacuation," supplementing risks beyond car rental insurance. We have compiled a list of key points for Seven Corners (USA Visitor) suitable for travelers entering the United States, allowing you to quickly assess whether you need it before departure.
👉See Seven Corners Travel Medical Insurance Highlights
15. Will insurance cover minor scratches?
Sometimes, it's not a collision with a person, but a minor accident like scraping a pillar while parking or hitting a wall while reversing. There's no police accident report. Will the insurance company cover it?
At this point, it's necessary to consider whether to purchase CDW/LDW and whether there is a deductible:
- With CDW/LDW (zero out-of-pocket expenses) → even minor scratches or paint damage will be fully covered.
- With CDW/LDW (including deductible) → The renter must first pay the deductible (e.g., $500 USD), and the insurance company will cover any amount exceeding that.
- No CDW/LDW → All maintenance costs are the responsibility of the renter.
16. Will rental car insurance cover the theft of items inside the car?
CDW/LDW and LIS do not include personal items; you need to purchase Personal Effects Coverage (PEC) separately.
However, when parking in urban areas of the United States, it is best to remove all items from the car. Even if PEC can cover your belongings, the amount will not be very high, and the actual loss is usually higher than the insured amount.
Extended Reading:Safety Tips for Driving in San Francisco
17. Will the insurance premium be higher for a young driver under the age of 25 who rents a car?
Yes.
In the United States, drivers under the age of 25 are considered to have a higher accident rate, so rental car companies charge a Young Driver Fee, which ranges from approximately $20 to $40 per day. (Sky Horse only charges US$19/day)
Although this fee is not an "insurance premium," your insurance coverage may be affected. For example, some companies restrict certain insurance plans for drivers aged 21–24. Taiwanese travelers can usually get a driver's license at 18, but in the United States, they need to be at least 21 to legally rent a car.
For information on any other additional costs, please see this article:12 types of additional car rental equipment and services fees
18. If I'm only renting for one or two days, do I still need full insurance?
Even if you only need to drive for short distances in sparsely populated suburbs, it is still recommended to at least buy a CDW/LDW.
Because once a car accident or incident occurs, the costs may far exceed the rental and insurance premiums for dozens of days, making it a losing proposition.
19. If multiple people are driving together, do the additional drivers need to purchase additional insurance?
An additional driver is required, but this does not mean separate insurance. In the United States, only the driver listed on the rental contract is covered by insurance. For example, if the renter is A, and B drives a short distance but is not registered on the rental contract, an accident could occur, and the claim would be denied. Driving without insurance can even result in a ticket, with a maximum fine of $720 under California vehicle laws.
Registering an additional driver typically costs $10–$15 per day, but Sky Horse charges only US$4.99 per day with no limit on the number of drivers. If the additional driver is under 25 years old, the same youth driver fee applies.
20. Is it possible to buy only third-party liability insurance and not vehicle damage insurance?
Theoretically possible, but the risk is extremely high. LIS only covers damage "to others," not the rental car itself.
This situation only applies to holders of certain US credit cards. If you pay for a rental car with a credit card, it will already include collision insurance, so you only need to add third-party liability insurance.
21. Is there a difference between the insurance offered by the car rental company and the insurance offered by a third-party platform (price comparison website)?
- Car rental company insurance: directly linked to the vehicle, the claims process is simple and handled directly by the car rental company after an accident.
- Third-party platform insurance (such as Expedia,Rentalcars.com): Usually the price is cheaper, but in the event of an accident, you may need to pay for the repairs yourself and then apply for compensation from a third-party insurance company. The process is more complicated and may be rejected due to insufficient documents.
If you are worried about language barriers or are unfamiliar with the claims process, we recommend purchasing insurance directly from the car rental company for more direct coverage and processing.
Extended Reading:Are cheap car rentals in the US reliable? Seven risks behind low prices.
22. Do I need to get extra insurance for long-distance travel (driving across state lines)?
InterstateLong-distance travelUsually, no additional insurance is needed, as long as the following is confirmed:
- Is the insurance valid across state lines? Most car rental companies offer insurance that is valid nationwide, but it's still best to check beforehand.
- Does it include a roadside assistance (RSA) plan? It is recommended to purchase this option for long-distance travel to avoid vehicle breakdowns in remote areas.
What are the insurance advantages of renting a car from Sky Horse?
Hopefully, these explanations have answered your questions and concerns about renting a car in the United States. Sky Horse's insurance plans, specially designed for travelers from Taiwan and Asia, clearly and simply list the details and coverage, so you don't have to worry about not understanding the English details or having difficulty making choices.
- Transparent pricing: Insurance packages are clearly listed, there are no on-site price increases, and many additional fees are lower and more transparent than those of chain car rental companies.
- Chinese-speaking customer service: We provide full assistance throughout the booking and claims process, so you don't need to worry about misunderstandings due to language barriers.
- Flexible options: Choose from CDW, LDW, and LIS as needed.
In summary, it's best to choose US rental car insurance that includes Damage Dealership (LDW) coverage for theft and Third-Party Liability Insurance (LIS/LI/SLI). For long-distance trips, consider adding roadside assistance. As long as you have the necessary coverage, most accidents will be fully covered, so travelers don't need to worry too much. It's especially important to note that traffic violations and accidents caused by drivers not listed in the contract are not covered.
Although car rental insurance is an additional expense besides renting a car, it's a small expense that saves a lot of money and makes road trips more worry-free and comfortable. Even if unexpected situations occur, you won't have to worry too much, which will greatly help the safety and enjoyment of your trip!
