Renting a car offers all the freedom and excitement of the open road when you’re traveling. But there’s one moment of picking up a rental that we all know and dread: rental car insurance. We know we’ll probably get a very insistent pitch from the rental car reps—they’ll tell us that if we don’t buy their coverage, and we damage the car, the whole thing will end in ruin. But is that really true? Here are some things to know about rental car coverage, so that you can make an informed decision the next time you rent a car.

Understanding your existing coverage

Before you think about agreeing to rental car insurance, take a closer look at your existing insurance policies. Your personal auto insurance and even certain credit cards might already provide coverage for rental cars. A lot of auto insurance policies extend coverage to rentals, often covering damages and liability up to the policy limits. But it’s important to contact your insurance provider to confirm the details of this coverage and any limitations.

Assessing your risk tolerance

When you’re deciding whether to purchase extra insurance, consider your risk tolerance. If you’re comfortable with the potential financial burden of covering minor damages to the rental car, your personal insurance coverage might be sufficient. But if the idea of dealing with unknown repair costs or potential liability stresses you out, insurance could offer a valuable extra layer of protection.

Reviewing rental company policies

Insurance offerings can vary widely among rental companies. Take the time to carefully review the details of the insurance options they offer. Some rental companies have a Collision Damage Waiver (CDW), which limits your financial responsibility for damage to the rental car. Others may offer Supplemental Liability Insurance (SLI), covering third-party injuries and property damage. By understanding these policies, you can make an informed decision about whether the rental company’s insurance meets with your needs.

Considering travel insurance

If you’re renting a car for a trip, your travel insurance policy might include coverage for rental car-related expenses. Travel insurance can offer an umbrella of protection that covers cancellations, delays, medical emergencies, and even rental car-related issues. However, as with all insurance matters, read the policy details thoroughly to ensure that rental car coverage is included.

Weighing the costs

Buying supplemental insurance can add a significant amount to the overall cost of your rental. Before you agree to it, calculate the total expense and compare it to your existing coverage. If the rental insurance costs are comparable to or exceed the potential costs of damage or liability, it might make financial sense to just rely on your personal insurance.

Special considerations

Certain situations might warrant additional insurance coverage. For example, if you’re renting a luxury or high-value car, your personal auto insurance might not adequately cover the potential expenses. Similarly, if you’re traveling internationally, there’s a good chance your insurance won’t extend to rentals in foreign countries. In those types of cases, rental car insurance could offer valuable protection.

The bottom line: rental car insurance

To figure out whether you really need to buy insurance when you rent a car, make a careful evaluation of your existing coverage, your risk tolerance, and the terms of the rental company’s policies. In many cases, your personal car insurance and credit card benefits might provide sufficient coverage for rental cars. But it’s essential to be informed so you can make a decision based on your individual circumstances.