It is Cheaper to Get Rental Car Insurance from Third-Party Providers

Last Updated on October 21, 2023 by SPN Editor

When you’re gearing up for a car rental adventure, one of the key decisions you’ll face is whether to opt for rental car insurance. The cost of rental insurance can vary substantially. Is it more budget-friendly to obtain rental car insurance from third-party providers?

We’ll discuss the typical costs of rental car insurance options, exploring both the rental company’s offerings and those available from third-party providers.

• Also Read: How to Get Affordable and Cheapest Car Insurance for Young Adults in the US

How Much Does Rental Car Insurance Cost?

The expense of rental car insurance is anything but fixed; it’s a variable that depends on multiple factors. On average, full coverage insurance tends to fall within the range of $30 to $60 per day. However, the real cost breakdown becomes apparent when you scrutinize individual options:

Car rental insurance fees can vary widely depending on several factors, including the type and level of coverage, the rental company, the location, and the duration of the rental. Here’s a general overview of some common car rental insurance fees:

1. Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW): This coverage typically ranges from $10 to $30 per day, but it can be higher for luxury or premium vehicles. Some rental companies may offer a flat fee for the entire rental period.
2. Supplemental Liability Insurance (SLI): SLI coverage can cost around $10 to $15 per day and provides additional liability protection beyond the state-mandated minimums.
3. Personal Accident Insurance (PAI): PAI coverage may cost approximately $5 to $10 per day and covers medical expenses for you and your passengers in case of an accident.
4. Personal Effects Coverage (PEC): PEC insurance fees can be around $2 to $5 per day, covering your personal belongings if they are stolen from the rental car.
5. Additional Driver Fees: If you want to add an extra driver to the rental agreement, there might be a fee of $10 to $15 per day for each additional driver.
6. Underage Driver Fees: If you’re under the age of 25, some rental companies charge an additional fee, often around $25 to $30 per day.
7. Location Fees: Rental car insurance fees can also vary based on the rental location and local regulations. Airports may have higher fees than off-airport rental locations.
8. Duration of Rental: Some rental companies offer weekly or monthly rates for insurance, which can be more cost-effective for longer rentals.
9. Third-Party Insurance Providers: If you choose to purchase rental car insurance from a third-party provider like Bonzah, the fees can be competitive, often starting at a lower daily rate compared to rental company insurance.

Buying Rental Car Insurance from the Rental Company

One common choice is to purchase rental car insurance directly from the car rental company at the rental counter. While it might seem like the most convenient option, it’s often the costliest. Rental company staff might encourage additional coverage, but it’s imperative to assess whether it duplicates your existing coverage.

Third-Party Providers: A Cost-Efficient Alternative

On the flip side, third-party providers offer a more budget-friendly route. Providers like Bonzah or Insure My Rental Car offer rental car insurance that can be significantly cheaper than what you’d find at the rental company’s counter. These third-party options often provide equivalent coverage, saving you money while ensuring you’re adequately protected.

Consider Your Existing Auto Insurance

Another vital aspect to explore is your own auto insurance policy. In many cases, your personal auto insurance may extend to cover rental cars within the United States. Review your policy to determine if this is an option for you. It’s also essential to identify any potential gaps in coverage that rental car insurance might fill.

Credit Card Coverage: A Valuable Supplement

Some credit cards offer secondary coverage for rental cars. Although it might not replace your primary auto insurance, it can serve as a valuable supplement, potentially saving you money while providing extra peace of mind.

Popular Car Rental Insurance Providers in the US

Some popular car rental insurance providers in the United States are given below:

1. Enterprise Rent-A-Car: Enterprise offers various insurance options, including Liability Coverage, Personal Accident Insurance, and Personal Effects Coverage, which can be purchased when renting a car.
2. Hertz: Hertz provides customers with options like Liability Insurance Supplement (LIS), Personal Accident Insurance (PAI), and Personal Effects Coverage (PEC) to enhance their rental insurance.
3. Avis: Avis offers rental car insurance options that include Supplemental Liability Insurance (SLI), Personal Accident Insurance (PAI), and Personal Effects Coverage (PEC).
4. Budget: Budget provides rental car insurance options like Supplemental Liability Insurance (SLI) and Personal Accident Insurance (PAI) to help renters protect themselves and their belongings.
5. National Car Rental: National offers insurance coverage options such as Liability Coverage and Personal Accident Insurance (PAI) for added peace of mind during your rental.
6. Alamo: Alamo offers various insurance options, including Liability Coverage and Personal Accident Insurance (PAI), to ensure renters have the coverage they need.
7. Allianz Global Assistance: While not a car rental company, Allianz Global Assistance provides travel insurance, including rental car collision coverage, which can be purchased separately and used with any car rental agency.
8. Bonzah: Bonzah is a third-party provider that offers affordable rental car insurance with coverage for collision damage, theft, and other incidents.

In many cases, third-party providers often offer comparable coverage at a fraction of the cost of rental company insurance. Before embarking on your rental car journey, take the time to explore your options.

By assessing your existing auto insurance, considering third-party providers, and understanding credit card coverage, you can make an informed and cost-effective choice, ensuring you’re both budget-conscious and well-protected.

FAQs

1. Is rental car insurance mandatory?

Rental car insurance is not mandatory, but it’s recommended to ensure you have adequate coverage in case of accidents or damage to the rental vehicle.

2. Will my personal auto insurance cover rental cars?

In many cases, yes. Your personal auto insurance may extend coverage to rental cars, but it’s essential to check your policy for specifics.

3. What is “loss of use” coverage in rental car insurance?

“Loss of use” coverage reimburses the rental company for income lost while a damaged rental car is being repaired and cannot be rented out.

4. Can I decline rental car insurance if I have coverage through my credit card?

Yes, you can decline rental car insurance if your credit card provides coverage. However, it’s important to understand the terms and limitations of your credit card’s coverage.

5. Are rental car insurance prices negotiable?

Rental car insurance prices are typically not negotiable at the rental counter. However, you can shop around for better rates with third-party providers before renting a car.