How to make sense of rental-car insurance.

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Author: Weaver, Peter

When renting a car, consider three sources of insurance: your own auto coverage, the rental car company's, and coverage offered by some issuers of credit cards.

Most, but not all, personal coverage includes rental cars. You might, however, run into some restrictions. For example, some insurers, such as State Farm, are pulling back coverage in some states for customers who rent cars or vans on business trips.

"We realize there are going to be a lot of gray areas with this change of rules," says Chris Stailes, a State Farm underwriting supervisor in Frederick, Md. One useful indicator, according to Stailes, "is whether it was taken as a business deduction on your income tax return."

If you have adequate personal insur ance, you probably don't need to sign up for the rental-car company's coverage. But there may be some special circumstances in which you might need it. For example, some insurers may not cover rental of four-wheel-drive vehicles, trucks, or certain vans.

Some issuers of credit cards, such as Citibank Gold Visa and MasterCard, don'toffer cardholders collision-damage-waiver coverage for certain four wheel-drive vehicles but do cover for ceftin vans. Other issuers do include four-wheel-drive rentals.

If your credit card includes collision-damage-waiver coverage, your own insurance still picks up the bulk of the damage claim. The card issuer picks up the deductible.

Before you reserve a rental car, it might be a good idea to find out what coverage you have, don't have, with whom, and under what conditions.