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If I book a rental car for a week in the US through the US website I can pay about $300 which becomes more like $550 if I take Loss Damage Waiver and Liability Insurance. But if I book from the UK website, I still pay the equivalent of about $300 but LDW and LIS are included in the price.

What gives? The hire-companies are apparently obliged to include LDW and LIS but why aren't they charging the same for it as they charge their US customers? Is it that much of a rip-off? Do few US customers take it because they have their own insurance? More importantly, is there a catch?

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    have you checked that the terms of those waivers are the same in the two cases? i.e. the mandatory waiver in the UK usually has a high excess ($1500), while if taken out separately like you seem to be doing when booking through the US site that excess is usually much lower or even zero. And: do double and triple check that in the UK case there is no catch like LDW and LIS are automatically part of the rental contract, but not included in the rate shown on screen. – greyshade Aug 27 '14 at 19:40
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    One possible factor is that normal US auto policies cover liability when driving a rental car. So a US resident who has to buy liability insurance when renting is someone who doesn't have their own car insurance. Maybe because they don't normally drive, maybe because they're so accident-prone they can't get insurance, maybe because they drive uninsured. Any of the above might suggest they're a worse risk. For LDW, many people get a similar insurance product through their credit cards, so those who buy it often either don't know what they're doing or are spending someone else's money. – Nate Eldredge Aug 28 '14 at 1:09
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    Those comments make sense to me -- I've checked and checked again, and emailed the company and they say there's no excess for the state I'm renting in. – user13190 Aug 29 '14 at 20:33
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I think the comments are giving some ideas of the possible reasons behind this choice. In particular, it depends a resident of what country you are.

I just tried to get a quote on a car in the US on Avis website and first I picked in the dropdown that I was a USA resident and the second time I picked that I was a UK resident. As you expected, I got the same price but the UK resident automatically had the Loss Damage Waiver and Additional Liability Insurance (same as your LIS, probably the name for Hertz).

I would tend to agree with @Nate that if you are a US resident or a tourist, you are not the same audience. And @Nate's suggestion that USA residents without a car are more accident-prone or under-insured is also backed by the fact that rental agencies usually require their customers to use a credit card (to check they have a good credit history).

But more generally, the prices offered by rental agencies are particularly opaque. Car rental is one of the activities, with flights, priced with these complex rules to optimize the earnings of the rental company. There are always a lot of different pricing policies, depending not only on insurance (including under age fee) but also adding various fees like the airport fees, pollution fees, depending on fuel policies (sometimes you have to prepay fuel), on the distance you are allowed to drive without extra fee, on where you return the car and on the discounts (you might have noticed that Hertz has 5 discount code fields: Discount/CDP/Club Code, Promotional Coupon (PC), Rate Code (RQ), Convention Number (CV), Voucher Number (IT)). I just discovered that Hertz adds a fee if you return the car more than 24 hours in advance, in some agencies!

I have booked cars in North America 5 to 10 times and it is always a mess because I try to get the best deal adding up these codes and once at the counter they do not get the same quote on their screen so they try for sometimes 30 minutes to get the same rate - or something close, because it is rarely the same rate and same conditions.

There are a lot of small prints to look at very precisely in the rental car contracts. The insurance is the most important, and I encourage you to read this protection "summary" from Hertz. It is complicated but in short you should really liability insurance, either provided by the rental company or by your car insurance company (if you have one). The rest is "optional", but like every insurance it is a matter of balance between risks and insurance price.

Still regarding the insurance, you should be careful because in some states, the liability insurance is not mandatory. This means some drivers causing an accident might not have an insurance covering you. If in theory they must pay for your health care in this case, they might not be able to afford it and you will in fact have to pay for it. California is concerned, but apparently at Hertz, in the case of foreign customers(those with an address abroad on their driver's license), there is a primary liability insurance anyway.

The bottom line

In the end what you noticed is probably a hint that pricing is very complex for car rentals. But it is good you paid attention to it, and in particular you should make sure your rental will be covered by at least a liability insurance (depending on the state it is not mandatory), since hospital costs in the US can be particularly expensive.

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    Note that not all countries have an address on the driver's license at all. – gerrit Mar 13 '15 at 15:40
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Disclaimer: As a car rental professional based in the UK (broker), I have a lot of insights when it comes to renting a car in both countries.

The answer is fairly simple: there are different rules in the USA for Americans and Canadians than for all other nationals in terms of insurance when hiring a car.

When a non American/Canadian citizen hires a car in the USA, it is mandatory for the rental to have included in the rate: CDW + Theft with zero excess + Third party insurance. For locals, their own insurance is accepted, therefore the car rental rate comes with no insurance at all. In some states there is a minimum requirement in terms of liability insurance.

A non us company cannot sell car rental in USA to American or Canadian citizens or US driving licence holders - because of the insurance differences.

Now, when hiring a car in Europe, it is mandatory for the rate to include Third party insurance and basic CDW + Theft protection with Excess. The excess varies depending on the car class you are hiring. If you wish to reduce the excess to 0 or to a smaller amount you can purchase extra cover either from the supplier or third party insurance. the 3rd party is cheaper, however works in a different way.

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