I own 2 cars (Mr & Mrs) and have insurance for both cars. We pay $4,260/- per year for the insurance for both cars. By the way I am in Ontario.

I would be travelling to US in the near future and am renting a vehicle in the US as we are flying to US. The rental is 23$ a day and the peace of mind insurance is 20$ a day! I have a credit card with RBC Gold (http://www.rbcroyalbank.com/RBC:SXnLWY71JsUAEFCuURo/cards/documentation/insurance/rewards_gold/cldi.html)which covers me for collusion loss/damage for the rental car in full but not for third party liability. I contacted my insurance broker and asked whether my current policy would cover 3rd party on rental and he said my policy does not have that after paying 4K for a year as well :uhoh: . Frankly I read the policy and do not understand the lingo!

My question is would it be better to take additional coverage on the policy or just pay the rental company the peace of mind coverage.

That sounds like a lot of money for that coverage. Did you check with your broker about a possible rider to your existing policy for the time you are in the US? Another place to try in Canada might be CAA. If you are a member ( if not , if they do offer something cheaper it might be worth becoming a member,) tell them of your situation and see if they offer anything. Those "extra fees and services" are what inflate your bill and add profit to the rental companies' bottom line. Hopefully there is a better choice that isn't as pricey.

THIRD-PARTY COVERAGE
Liability coverage purchased by the policyholder as a protection against possible lawsuits filed by a third party. The insured and the insurer are the first and second parties to the insurance contract

(from http://www.iii.org/individuals/iiitools32/?searchstring=Third-party%20coverage&mode=exact )

Also, check out this link (http://www.avvo.com/legal-guides/ugc/first-party-third-party-auto-insurance-washington-state)

If this is your meaning of "3rd Party Coverage", then this coverage is what would protect you from the other insurance company suing you, which could occur if you were at fault in an accident.

I'd check to see if you can purchase a rider, as '97ventureowner said. A rider covers a specific thing, sometimes for a specific length of time; 3rd party coverage in the US (or, for US drivers, coverage in Mexico for a time) are examples.

Talk to your broker about getting the additional coverage for your trip, then compare the cost vs the rental company.

It's a difficult decision, especially if you're a good driver. You have to weigh the peace of mind vs the cost.

Hopefully that was of help.