TIME WAS when the car rental agent at the counter asked if you wanted to purchase any additional insurance, you didn't have to think twice. You could turn down the costly add-ons with confidence, knowing you were fully covered by your personal auto insurance or the credit card on which you charged the vehicle.

But the high cost of auto insurance has some credit card and insurance companies changing their policies, so you may not have as much coverage as you thought, if any at all. American Express, for one, has stopped covering cardholders in several foreign counties (Jamaica, Ireland, Israel, Italy, Australia and New Zealand). No other credit card companies have followed suit yet, but many insurers are looking for ways to cut back on the costs of rental car coverage. In addition, rental companies vary from location to location in the rates and terms of their insurance policies, with additional conditions and restrictions that affect coverage.

WHAT YOU NEED AND WHAT YOU DON'T
LIABILITY INSURANCE SUPPLEMENT
WHAT IT DOES
Augments the minimal liability protection provided by the rental car company for bodily injury and property damage to third parties.
DO YOU NEED IT?
If you do not have your own collision and comprehensive coverage, it's worth your peace of mind to purchase it.
COST PER DAY
About $9 or $10 for up to $1 million in third-party liability coverage.
COLLISION DAMAGE WAIVER (CDW)
OR LOSS DAMAGE WAIVER (LDW)
WHAT IT DOES
Not actually insurance, but an agreement that waives or reduces the customer's responsibility for loss of or damage to the rental car.
DO YOU NEED IT?
If you have comprehensive auto insurance or are covered for collision damage by your credit card, you can forgo CDW.
COST PER DAY
From $9 to $20, depending on the rental location and the class of vehicle.
PERSONAL EFFECTS COVERAGE
WHAT IT DOES
Provides limited reimbursement for loss of personal property during the rental period.
DO YOU NEED IT?
Skip it. Your homeowners or renters insurance should cover your belongings.
COST PER DAY
From $2 to $5, sometimes sold in conjunction with Personal Accident Insurance.
PERSONAL ACCIDENT INSURANCE
WHAT IT DOES
Provides accidental death and medical expense benefits to the renter and all passengers in the car.
DO YOU NEED IT?
If you have your own health insurance, you won't need the extra coverage.
COST PER DAY
From $2 to $5, sometimes sold in conjunction with Personal Effects Coverage.

The only way to ensure your coverage is to examine both your own car insurance policy and the rental car contract very carefully before you even get to the rental counter. While you're at it, check your homeowners policy for coverage of your personal effects while in a rental car. Although Visa and Master Card provide comprehensive rental car coverage in the U.S. and abroad to premier cardholders (gold or platinum), and some standard cardholders who use the card for the purchase, policies may vary depending on the issuing bank. It's best to call your card's 800 number to verify the specifics of your coverage. When you pick up your car, you'll be bombarded with myriad options -- do you want a Collision Damage Waiver, Liability Insurance Supplement, Personal Effects and Accident Insurance? It's best to figure out what you need in a less strenuous setting.

"You should know exactly what coverage you want to purchase before you get to the counter," explains Lauren Garvey, a spokesperson for Hertz. "Our agents are trained to tell you what each option covers, but you have to know what coverage you need."

Here are a few things to keep in mind when deciding what additional coverage, if any, you should purchase from the rental car company:

Liability. The provisions of liability protection vary from state to state. Rental car companies will provide the minimum basic liability protection required by law for bodily injury and property damage to third parties, when the car is used in accordance with all terms and conditions of the rental agreement. If you're ticketed for speeding, for example, you may not be covered. This coverage is usually very small, so they also offer an optional Liability Insurance Supplement (LIS). LIS usually runs about $9 or $10 a day for up to $1 million in third-party liability coverage, but if you don't have your own collision and comprehensive coverage, it's worth your peace of mind to purchase it. "Liability is infinite," explains Jeanne Salvatore of the Insurance Information Institute, "It is far cheaper to pay an extra $100 or so on your rental than be saddled with a $400,000 judgment because you were involved in an accident."

Collision Damage Waiver. Also known as a Loss Damage Waiver, the CDW is not actually insurance, but an agreement that waives or reduces the customer's responsibility for loss of or damage to the rental car. In New York and Illinois, collision damage coverage is included in your rental contract, but in other states and abroad you will pay anywhere from $9 to $20 a day for the waiver, depending on the location and the class of vehicle. If you have comprehensive auto insurance or are covered for collision damage by your credit card, you can forgo CDW.

Personal Effects Coverage. Provides limited reimbursement for loss of personal property during the rental period. Skip it. Your homeowners or renters insurance should cover your belongings.

Personal Accident Insurance. Provides accidental death and medical expense benefits to the renter and all passengers in the car. Again, if you have your own health insurance, you won't need the extra coverage.

Business Travel. Your personal auto insurance will cover you in a rental only if you're using it for pleasure. On business, the onus is on your employer. Contact your company to find out what it covers and what additional insurance you should buy.

Specialty Vehicles. Some insurance policies will not cover luxury, four-wheel drive or off-road vehicles. Check your policy; car rental companies will often provide additional insurance for such specialty vehicles for a price.

Renting Abroad. Most car insurance policies do not cover you in foreign countries, and, as mentioned above, some credit card companies are scaling back in certain countries. If you are planning to rent a car abroad, Salvatore suggests you sit down with your insurance and travel agents to find out what will be covered, and purchase any additional insurance needed in that country.