header Car Insurance

Everything You Always Wanted To Know About Comprehensive Car Insurance for Rental Cars

By Juhi Walia
14 October 2022, 1:45 PM

A rental car is a breath of fresh air if you want to enjoy the luxury of moving about in an expensive car without buying the same. You need not spend a significant amount on car maintenance and paying for other expenses. The vehicle can be rented for a few hours or a few days based on your need. You just need to bear the cost of fuel. Despite such privileges, one expense that you cannot do away with is car insurance. You need to protect your ride with a comprehensive car insurance policy when renting a car. The coverage mechanism of rental car insurance differs from that of a personal one. Also, liability protection and other advantages may vary based on the rental agency and the geographical area where you will drive the car. This post offers insights into the dynamics of the comprehensive rental car insurance policy.

Comprehensive Car Insurance for Rental Cars

Rental car insurance must fulfill the legal obligation mandated by the Motor Vehicles Act, 1988. Further, it lets you enjoy absolute peace of mind while driving as the insurer will take care of the financial liabilities arising from accidental damage or third-party-related incidents. You can get an overview of the different features of a comprehensive car insurance policy for rental cars below.

Features of a Comprehensive Rental Car Insurance Policy

Some of the features of the comprehensive car insurance policy come bundled up with it, and some can be opted for as car insurance add-ons by making an extra payment.  

CDW (Collision Damage Waiver)

If an unfortunate accident causes damage to the rental car, the insurer will pay for the expenses incurred in repairing the body of the damaged car. This waiver doesn’t apply to damages sustained due to: 

  • Car’s interior
  • Engine
  • Tyres
  • Gearbox
  • Battery
  • Windshield
  • Other parts not related to the car’s frame

Compensation shall be denied if findings suggest that the collision occurred due to your rash or drunk driving.

Third-party Liability Coverage

The 3rd-party car insurance component covers financial liabilities owing to the following scenarios involving your insured four-wheeler:

  • Damage to the property of the third party
  • Injury caused to the third party leading to partial or full impairment
  • Death of the third party

The coverage will be withdrawn if you are found not obeying the traffic rules during the accident.

Car Theft Protection

If the car is stolen, you need not pay its present market value to the rental company. Your insurer will settle the compensation payment with the company on your behalf. Further, even if the theft attempt is foiled, the miscreants can cause damage to the car. The insurer will bear the expenses incurred in repairing such damage.  

Read more - Theft Cover in Your Car Insurance

SCDW (Super Collision Damage Waiver)

This rental car insurance add-on offers an upgrade for CDW. The insurer will bear the repair cost even if the accident causes damage to the undercarriage, battery, and other components not covered under CDW. You can rest assured that the insurer will cover repair expenses even if the rental car is badly damaged in an accident.

SCDW’s protection stands revoked if the damage is caused due to:

  • Collision with overhanging road objects
  • Getting struck by a barrier whose height doesn’t permit safe passage of the car or which is not completely opened
  • Reckless driving on a poor road (undercarriage gets hit by undulations), beach (sand/ saline water ingresses the engine), or road inundated with flood water
  • Not paying heed to traffic light
  • Topping up a different or contaminated fuel
  • Misuse of handbrake or clutch
  • Driving with a flattened tyre resulting in wheel rim damage
  • Objects (not recommended by the car makers) fitted in the car’s interior/ exterior
  • Inflammable liquids carried in the car
  • Open windows of a parked car
  • Attempting to enter the car after losing the keys or forgetting them inside the locked car
  • Drunken driving

SCDW doesn’t cover damages to the windscreen, tires, upholstery, display screen, and other objects in the car’s interior.

Roadside Assistance Cover

If the car you have rented suffers a breakdown on the road, leaving you stranded, the car insurance company will make provisions for:

  • Troubleshooting the problem over the phone
  • Sending a towing vehicle for hauling the car to the nearest garage
  • Dropping you at home or the closest hotel

All expenses related to the repair of the broken-down car shall be taken care of by the insurer. You can also call the insurer for assistance if your vehicle has run out of fuel or has suffered a tire puncture.

Supplemental Liability Insurance (SLI)

Usually, the third-party car insurance coverage for rental cars is low. It may not be adequate to fully compensate the third party who has suffered bodily injury or property damage after being hit by the rented vehicle. SLI increases the coverage limit sufficiently, so you don’t have to bear any expense from your pocket. It is an add-on feature.

Uninsured Motorist Protection (UMP)

UMP is invoked when your rental car meets with an accident, but the fault is not yours. The accident occurred because of the recklessness or inattentiveness of the driver of the other vehicle involved in the accident. However, the faulty driver may not have a third-party car insurance cover to pay for your car repair or medical expenses. Through the UMP add-on, the insurer bears all the costs on behalf of the driver at fault.


The importance of comprehensive car insurance for rental cars cannot be overemphasised. You are taking ownership of another’s vehicle for a limited time. If a mishap occurs in that duration, the comprehensive policy will safeguard you from all sorts of financial liabilities. You can enjoy absolute peace of mind while riding. Your insurer will compensate the rental car owner even if the car is stolen. 

Read more - Buying Car Insurance Online vs Offline


1. For which part of the rental car does the insurer reimburse the damage repair expense under the ‘collision damage waiver’ feature?

You are only compensated for the cost incurred on damage repair for the car’s body.

2. Miscreants had tried to steal the car I had rented. They could not get away with it but caused damage to the vehicle. Will the car insurance company pay for the damage repair?

Yes, the damage repair cost for the foiled theft attempt of the rental car is also reimbursed. Make sure to take pictures of the damage as proof.

3. What will happen if the rental car is damaged by another vehicle whose driver doesn’t have third-party car insurance coverage?

In that case, your insurer will bear all the expenses provided you purchase the UMP.

4. What is supplemental liability insurance add-on?

It enhances the insurance coverage value for third-party bodily injury or property damage.

5. What is the super collision damage waiver add-on in rental car insurance?

It is an upgrade to collision damage waiver. The insurer will pay for the repair of damages to other parts of the car apart from its body.

Car Insurance banner
Car Insurance

Starting at only ₹6 per Day*

Enter your details to buy Car Insurance
By proceeding you agree to Terms & Conditions
Proceed without car number