Most rental car companies offer several different types of insurance. Be advised: the rates you pay for this insurance are highly inflated. However, if you do not have private automobile coverage that provides protection for a rental car in the U.S., you would do well to purchase some insurance coverage from the rental car company.
When you rent a car, the company expects you to return it in the same condition it was in at the start of the rental, except for normal wear and tear on the vehicle. Some companies will not hold you responsible for loss or damage caused by accidental fire (not resulting from collision, rollover, theft or vandalism) or acts of nature or God beyond your control (for example, a hurricane or tornado).
If the car is damaged in an accident, whether or not it is your fault, you are responsible. You can purchase Loss Damage Waiver (LDW) insurance from the rental car company. What this insurance does is relieves you of all responsibility for the damage, no matter what the cost -- even if the car is totalled. If you have no auto insurance coverage, this is probably something you should consider.
Other insurance along this line provides partial or limited coverage, thus leaving you with some potential financial responsibility. The tradeoff -- less cost per day. Full LDW can be expensive, but if you have no other auto insurance, it's a good idea.
These next two are a waste of money.
Personal Accident Insurance (PAI) -- this is health insurance that pays for medical care if you are injured in a car accident. However, it's expensive and very limited -- most coverage won't exceed $2000 - $3000 and that might not even cover your ER bill. Waste of money.
Personal Effects Coverage (PEC) -- reimburses for theft of items ONLY if they are stolen from the car. Another waste of money because it's expensive, but would only cover (usually) less than $2000 of personal items.
