This topic is so relevant we could write a Chartwell Bulletin on it. However, the New York Times has written it so well it is hard to improve on it.
Do you really need rental car insurance?
A more comprehensive insurance policy provided by insurers like Chubb, AIG Private Client Group and PURE will usually extend coverage to rental cars and include loss of use coverage (to the extent it is permissible by law). This is a charge by the rental car company for loss of revenue when the car is out of service for repairs. Towing of the rental would also be covered, either by calling the insurer for a tow or by submitting the towing bill to the insurer for reimbursement. Other insurers like Progressive will cover damage to the rental car. The coverage is less comprehensive and will not offer loss of use of the rental car or towing coverage for the rental car in the event of a breakdown. This may be available from a credit card company which offers “excess” coverage. The excess coverage would apply because the primary automobile insurer is not providing it.
International rentals may be covered by the more comprehensive policies that offer worldwide coverage rather than coverage limited to the US and Canada. Some countries require the purchase of collision coverage on a rental car and will not allow the coverage to be declined on the rental contract.
Always check with your agent when in doubt.