Before diving into the four different types of insurance provided by rental car agencies, it is important to know that coverage is optional. You can rent a car without purchasing the additional coverage. That doesn't mean you shouldn't. If you're only insured under a commercial car insurance policy, your current policy doesn't have comprehensive and collision coverage, or you just don't want to risk paying a high deductible you should purchase rental car insurance. However, this additional coverage can add up to $40 per day to your rental bill.

Find out more about hidden surcharges by reading, 12 Hidden Surcharges When Renting a Car.

 Rental car agency's additional insurance is primary coverage with a third party. With this additional insurance, if you get into an accident you will avoid involving your personal auto insurer and avoid any potential rate increases. The four types of rental car insurance are: 

• Collision Damage Waiver (CDW),
• Supplemental Liability Protection (SLP),
• Personal Accident Insurance (PAI), and.
• Personal Effects Coverage (PEC)

Collision damage

Of the four rental car insurance coverages, the collision damage waivers (CDW) or loss damage waivers (LDW) offers the most protection. This coverage essentially takes the place of your own comprehensive insurance if the rental is stolen, vandalized or crashed. So, if you already have comprehensive and collision insurance for your own car, there is no need to buy into this coverage.

While your regular car insurance policy probably includes collision coverage for rental cars, it may not pay for loss-of-use charges while the rental's in the shop, towing charges, and related fees. This is when the $9 to $19 per day collision damage waivers will come in handy. However, the CDW may become void if the car is driven by an unauthorized driver, an accident was caused due to speeding, driving under the influence or even driving on unpaved roads.

Liability protection

Whether it's called Supplemental Liability Protection (SLP), Liability Insurance Supplement (LIS) or Supplemental Liability Insurance (SLI), this coverage insures you against damages to other people's property and their medical expenses if you cause an accident while operating a rental car. Though every state requires a minimum amount of liability insurance on car insurance policies, you may want the extra coverage liability protection provides. For a fee around $11 per day, the rental agencies SLP becomes your primary liability coverage and provides up to $1 million of liability protection. This leaves your personal auto liability insurance to be used as excess-coverage.

Personal accident insurance

While Liability insurance covers those in other vehicles, personal accident insurance covers medical, ambulance and death benefits for you and your passengers. This type of insurance usually costs about $1 to $5 per day and can provide around $3,000 in medical, $200 for ambulance benefits and $175,000 in death benefits. It's likely that you are already covered by your health, life or car insurance policies, however there may be gaps, such as deductibles, that could leave higher medical costs after an accident.

Personal effects coverage

While you may already have yourself and the vehicle covered, there is a chance that you don't have coverage for the valuables inside the rental car. Whether you are traveling for work or using the rental for a personal trip, it's likely that you are traveling with items you'd want to insure. Personal effects coverage usually costs about $1 to $4 per day and against damages and theft of personal items in the car. You can expect about $500 per person of insurance coverage, maxing out at $1,500. You may assume that your auto insurance will cover your personal items in the car, however it is more likely to be cover under homeowners or renters insurance. If you have homeowners or renters insurance, typically your own policy will pay first. When those policy limits have been reached, the PEC will then kick in.

A partnership you can rely on

If you are looking for a transparent and hassle free way to rent a car, you should consider the CoVest / Hertz agreement. Hertz Corporation has partnered with CoVest to bring our members better travel options. Operating their vehicle rental brands in corporate and licensee locations throughout 150 countries, the Hertz Corporation is one of the largest worldwide airport general use vehicle rental companies. 

Why Hertz?  Product and service initiatives such as Hertz Gold Plus Rewards, eReturn, Mobile Wi-Fi and their newly improved car fleet set Hertz apart from the competition. Additionally, CoVest members using the Hertz agreement gain access to exclusive benefits including no blackout dates, no energy surcharges, aggressive pricing and customer specific reporting.

Visit www.covest.com to view the CoVest / Hertz deal structure.