Save Big on Car Rental Insurance: Must-Know for Domestic Travelers

For international travelers visiting the United States, renting a car is a convenient and cost-effective way to get around. Many travel agencies and car rental companies offer easy-to-use online car rental services.

Car rental insurance provides protection and coverage in the event of an accident or damage to the rented vehicle. Most car rental companies offer a range of insurance options.

Categories of Car Rental Insurance

1. Protect the Car – Collision Damage Waiver/Loss Damage Waiver (CDW/LDW)

Collision Damage Waiver or Loss Damage Waiver protects the renter in the event of damage to or theft of the rented vehicle. It typically covers the cost of repairs or replacement of the vehicle, and limits the renter’s financial liability.  

2. Protect yourself from liability – Liability Insurance Supplement (LIS)

Protect yourself from liability after an accident. Get coverage from any third-party claims made against you. For example, if you rear-end the car in front of you while driving, it is your fault and the LIS coverage will pay for the property damage and medical expenses of the car that was rear-ended.

3. Protect yourself, passengers & belongings – Personal Accident Insurance (PAI) and Personal Effects Coverage (PEC)

Typically, these 2 insurance coverage are sold separately due to their different protections. However, more and more rental car companies are now bundling them together, which protects medical expenses and property loss/damage for both you and passengers.

4. Roadside Assistance

Roadside protection provides assistance and coverage for common roadside problems such as flat tires, dead batteries, and lockouts. Without roadside protection, you may be responsible for the cost of towing or emergency services, which is usually twice or more the price of the insurance. 

The Average Cost of Car Insurance at a Rental Car Company 2023

We selected 8 well-known rental car service providers in the United States to give them a comprehensive score (out of 5 stars) on rental price, service and car insurance. The more stars in the rental cost, the lower it is.

Below are a few average prices for coverage per day from popular rental car companies.

First Tier

Enterprise is one of the top car rental companies worldwide. They have top-notch cars and provide excellent customer service, and they offer an extensive range of insurance options. However, they have the highest prices, which make them suitable for those who prioritize the quality and experience of their travels.

Second Tier

Alamo is a sister company to Enterprise, and they offer slightly lower prices and excellent customer service, coupled with a comprehensive range of insurance options. Avis and Hertz are also a good option since they are comparable to Alamo in overall conditions, making these three companies ideal for those who want to strike a balance between affordable pricing and quality service.

Third Tier

Budget, Dollar, Thrifty, and Sixt are generally considered mid-range car rental companies, and their prices are typically reasonable. If you’re looking for basic transportation and want to save money, any of these 5 firms would be suitable. You can also save even more money by using a Thrifty or Budget promo code, which can usually save you 10% or more.

However, please note that Budget, Hertz, and Dollar don’t provide roadside assistance insurance, while Thrifty requires you to buy roadside assistance insurance at the counter. Lastly, Sixt’s 3 insurance packages don’t contain PAI & PEC.

Get Free CDW/LDW Insurance with a Qualified Credit Card

After investigating these 8 car rental service providers, it’s clear that CDW/LDW insurance is the most expensive and is charged on a daily basis. This could result in significant expenses if you rent a car for 3 days. Fortunately, many qualified credit cards offer rental car insurance, usually including CDW/LDW insurance.

Important Note:

• If you want to use the rental car insurance provided by your credit card, you must pay for the rental car using that credit card. Most credit card rental insurance coverage has a maximum of 30 days.
• For the coverage to be applicable, the cardholder must decline the collision damage waiver (CDW) or similar coverage offered by the auto rental company.
• Choose primary insurance if possible. Some credit cards offer primary rental insurance, which means that in the event of an accident, it will be the first insurance to pay for the loss. Here are some credit cards that offer primary rental car insurance with affordable annual fee:
  • Ink Business Cash – $0
  • Bilt World Elite Mastercard – $0
  • Chase Sapphire Preferred Card – $95
  • Ink Business Preferred – $95
  • United Explorer Card – $95
  • United Business Card – $99

• If you don’t have a credit card that offers primary car rental insurance, your next best choice is a card that provides secondary insurance.
  • Citi Double Cash Card – $0
  • Capital One SavorOne Cash Rewards – $0
  • Chase Freedom Flex – $0
  • Citi Double Cash Card – $0
  • Bank of America Business Advantage Travel Rewards World Mastercard – $0

• Not all car types are covered. As long as you choose one of the standard categories of car rentals, such as compact, intermediate, or full-size, your credit card’s car rental insurance should remain valid. However, certain specialty vehicles like large passenger vans, pickup trucks, antique vehicles, RVs, and motorcycles are often excluded from most insurance policies.

Bottom Line

Most U.S. car rental companies offer a range of insurance options, but on a daily basis, prices aren’t affordable. CDW/LDW is the most expensive insurance, but luckily, you can get it for free by paying with a qualified credit card, and then purchase other insurance from the rental company according to your needs. 

A credit card that offers primary insurance is your first choice, followed by a card with no annual fee that offers secondary insurance.

Alamo, Avis and Hertz are highly recommended companies because they offer great value for your money and comprehensive options of insurance. Other car rental companies, such as Budget and Dollar, don’t offer road assistance, but they are more affordable and offer promo codes to save even more.