Most car rental contracts in the United States make the renter liable for all damage to the vehicle so you want to make sure you have either your own auto insurance that will cover the rental car or buy insurance from the rental car agency that will cover the vehicle.

Before renting a car in the US you should check with your own Australian car insurance company to see if any of your coverages from that policy will extend to a US rental car. Usually it will not. Also, some credit cards provide limited protection if you use the card to charge your rental. Some credit cards provide free CDW but most only pay the deductible only after a primary insurer pays on a claim. Call your credit card company to ask about your specific circumstances.

To rent a car you will normally need liability coverages that are at least the state minimum for where you are renting the car. Liability coverages usually include bodily injury and property damage so that if you cause an accident the party you hit can make a claim. For example Alamo Rent A Car's website states that Alamo provides the minimum state financial liability coverage in the base rental rate only, where required by law and under certain Rate Codes. This coverage may only be applicable if the driver's personal auto policy provides no coverage or inadequate coverage. You thus should check to see what is included in the rental rate and what you need to provide on your own.

Collision Damage Waiver (CDW), in states that allow it, is an optional coverage that rental car companies normally offer for around $10 to $15 a day. It is called collision damage coverage however it is more of a guarantee that the rental company will pay for damages to your rented vehicle that it may sustain. If you decline the waiver, you accept responsibility for any damages.

CDW does not pay for bodily injuries or damages to you or your personal property. If you do not buy CDW coverage or are not covered by your personal auto insurance policy, you could be liable for the full value of the car. Be sure to read through the exclusions of any CDW contact.

Some CDWs exclude coverage under certain circumstances. For example, coverage may be invalid if you damage the car when driving it in a negligent manner, on unpaved roads, or out of the state in which you rented the vehicle. Some companies void their CDW coverage if a driver drinks alcohol or if a non-authorized driver operates the car.

In addition to CDW coverage rental car companies off many other optional coverages such as personal accident insurance (PAI) which pays a death benefit and portion of your medical expenses if you are in an accident. If you have health insurance or other coverages that take care of this then it likely would not be needed for a rental car.

Most major rental car companies allow foreign visitors to rent vehicles as long as they have a valid readable un-expired license from their country of residence. If the license is not in English, some rental car companies will require a valid International Drivers License or Permit (IDP) to be presented in conjunction with the valid foreign driver's license. The IDP alone will not be enough to allow you to rent a car.

Some rental agencies will not rent to anyone under the age of 25 or will but charge a higher fee. So if you are below 25, check on the rental car company's restrictions when booking your rental vehicle.

There are some rental companies that have extra restrictions depending on what country you are licensed in so ask if there is anything you should be aware of as an international tourist renting the car with your Australian license.

To find out what insurance options are available to you from the rental company you plan to use while in the US check with their website which if usually a national chain should list what your base rate includes as well as what optional coverages are available. You then should speak with your own insurer to see if any coverages are extended to you from your Australian insurance. With all of this knowledge you should be able to determine what insurance coverages a rental car company offers is right for your situation.

In this situation, it is most likely the best option to purchase the coverage offered by the rental car company.