How to choose rental car insurance

There are four main options when it comes to purchasing rental car insurance:

• Buy insurance from an online comparison site
• Purchase coverage directly with the rental company
• Protect your vehicle through a third-party insurer
• Choose not to buy any additional insurance at all

Buying rental car insurance is not a must, but it can save you a ton of money if you get into an accident. Most rental packages include basic types of coverage that offer minimal protection from fees due to collision damage, theft and third-party liability. You can also purchase additional insurance to supplement what the standard coverage protects.

Where you purchase that insurance from, however, isn’t so straightforward. Whether you buy coverage from the rental company or book an all-inclusive package online, each choice comes with its own set of perks and limitations.

This guide explains what your options are, so you can be confident you have the insurance you need at the right price.

There are four main options when it comes to purchasing rental car insurance. You can:

1. Buy insurance from an online comparison site
2. Purchase coverage directly with the rental company
3. Protect your vehicle through a third-party insurer
4. Choose not to buy any additional insurance at all

Buy insurance from an online comparison site

When you book your rental car online through a comparison site or broker, you can easily compare rental companies, cars and prices simultaneously. You can also buy additional insurance to top up what your deal already includes.

Pros

• The price is often lower than the coverage offered by the rental company
• You can book your rental from home on your own time and compare prices
• If you rent a car abroad, you don't have to worry about a language barrier, since you can submit a claim after returning home
• The company you purchased insurance from can help fight rental charges you don’t agree with

Cons

• The price can be higher than insurance bought from a standalone insurer
• If the car gets damaged, you must pay the rental company first, then submit a claim for reimbursement
• This type of insurance won't reduce the supplemental insurance or deposit you pay when you pick up the car

Purchase coverage directly with the rental company

If you book your car directly with the rental company, you can buy coverage at the same time – either online or when you arrive at the rental counter. Unlike actual insurance, you sign a waiver with the company indicating that it waives its right to charge you for damage.

Pros

• If something happens to the car, you won’t be required to pay anything out of pocket as long as you meet the rental company’s insurance terms
• This type of coverage or insurance can reduce your security deposit and supplemental insurance – in some cases to zero

Cons

• The price can be more expensive than insurance bought through a comparison site or third-party insurer
• There's no separate insurance company to help fight charges you don't agree with
• Often, this coverage is a type of Super Collision Damage Waiver, which is not technically insurance and is unregulated

Protect your vehicle through a third-party insurer

You can choose to buy rental car insurance from a third-party insurance company. This is often sold as 'excess’ or ‘supplemental’ insurance.

Pros

• The price is often lower than buying from a comparison site or rental company
• You can sort it out from home
• If you rent a car abroad, you don't have to worry about language barriers as you'll submit your claim when you're back home
• The company you bought your insurance from can help fight charges you don't agree with

Cons

• If the car gets damaged, you'll have to pay the rental company first, then submit a claim for reimbursement
• This type of insurance won't reduce the supplemental insurance or deposit you pay when you pick up the car

Choose not to buy any additional insurance at all

If you’d like, you can just stick to the basic coverage that comes with your rental package.

Pros

• There's no additional cost; you simply pay for your rental car

Cons

• If the car is damaged during your rental period, you'll lose your deposit
• Because the basic insurance package only covers bodywork, you'll have to pay the full cost of any repairs needed for the engine, undercarriage, windows, wheels, etc.
• There's no separate insurance company to assist you in fighting charges for something you don't agree with

Insurance checklist

To help you choose the right insurance policy for your rental car, here are a few questions to consider:

• Does it cover damage to the engine, tires, wheels, roof, undercarriage, windows, and mirrors?
• Does it cover towing costs and roadside assistance?
• Does it cover your luggage and other personal items?
• Does it cover you if you lose the keys?
• Does it cover rental company admin fees?
• Is it actually regulated insurance?

Choosing the right rental car insurance for you

Here are your options so you can easily compare: