A rental car insurance policy offers a variety of car insurance policy to its clients. The most basic among all insurance policies is called a damage waiver. A damage waiver typically includes a physical damages waiver, loss damages waiver and collision damages waiver. This coverage will protect you in case your rented car collides with another car.

While the collision damages waiver takes care of the damages caused to the car during an accident, on the other hand physical damages waiver will pay for any damage caused to the car due to other reasons besides collision. The loss damages waiver will pay for any part that was stolen when the car was in your possession. Rental car insurance might have certain limitations therefore, it would be best to read the insurance document carefully before purchasing.