Do You Need Rental Car Insurance?

When the clerk behind the car rental desk slides that form across the counter and says, "Initial here, sign here" and "Oh, check here if you waive liability and collision," it's just natural to picture the worst.

Should you check that little box on the rental form? Do you really need that insurance? It's only a few extra dollars, but why pay more?

No matter what you choose, you may still end up feeling confused and, if you do, you have plenty of company.

According to a survey by the Kansa City, Mo.-based National Association of Insurance Commissioners, nearly 42 percent of U.S. residents don't understand car rental insurance.

"When renting a car, many consumers purchase unnecessary insurance and end up wasting money. Meanwhile, other drivers inadvertently underinsure their rental car, placing themselves at risk," NAIC President and Alabama Insurance Commissioner Walter Bell said.

Of the people surveyed, 34 percent of respondents said they purchased the rental company's insurance just to make sure they were covered, and 24 percent were not sure whether their credit card provided coverage when renting a car, the NAIC said.

The NAIC recommends consumers contact their insurance agents and credit card companies before renting a vehicle, to inquire about specific coverage needs. The NAIC noted that company travel is not covered by personal car insurance and rentals of longer than a week might have different conditions.