Insurance through car rental websites

When renting a car through a website such as, it offers “full protection” insurance which, in some cases, it costs as much as hiring the car. It warns that if you don’t obtain the insurance, you aren’t covered.
However, when you attend the actual dealer, they tell you that you are not covered under their insurance, meaning if anything happens to the car, you’ll be charged $4,000 (“only”) and then will have to claim against the third party insurer. As most of us cannot afford to be $4k out of pocket, we land up buying insurance from the dealer directly as well. For instance, I hired a car through rental for one day (cost $90), purchased “full protection” insurance ($89) and then paid an additional $39 at Thrifty for their insurance. Thrifty also took a deposit of $397 on my card, which was not immediately refunded.


Choice has covered car rental insurance in the past and provides some great advice on what to watch out for an what insurance is best to cover rental cars in the event of an unfortunate incident which damages the car.

What we have learnt ourselves is that it is far cheaper and more convenient to take out independent insurance to that offered by a car rental company. If we travel domestically (privately), we know often take out domestic travel insurance. Not only does this cover the whole of the excess often incurred in an accident in a rental car (rather than a reduced excess often offered by rental car companies), but there is additional insurance for other travel items.

One just needs to be firm and say no…knowing that their own homework and independently sourced insurance is better than anything that can be offered by a car rental company/

These are often used by car rental companies (and others such as hotels) as a hold on the car of a particular amount which covers the excess associated with the insurance.

It is also worth noting that car rental insurance has a lot of limitations (e.g. not covered if an animal is hit, no cover in a single vehicle accident etc) which can also be overcome with separate and independent insirance.

Yes, making a claim against your own travel insurer may seem like an additional step, but it is more than worthwhile than being potentially exploited by the car rental industry.


That is the salient point in the OP, not just the cost of insurance from A or B, but that if there is an accident and one did not purchase the insurance from the rental car company directly, they will invoice you for damages and most will put the full excess or more on your charge card. Having to deal with that whilst one makes a third party insurance claim? Not always viable for many of us.

One thing I have found applicable to the USA is that if I book a vehicle from the US rental comes with full insurance bundled in and in many if not most US airport locations the local tourist/convention.convenience taxes unique to airport locations and certain cities/counties that are often another 25% or more on top of the rental costs are waived for the foreign traveler, all location dependent.

We recently rented a car in Houston TX for 5 days using, $USD371 all up, $AUD106 per day at current xrates. No exactly cheap, but in the litigious US and especially in a city where the first 3 seconds of a red signal means floor it, right turns on a red light are legal and normal, and a significant number of drivers are 10-20 MPH over the limit, it provided piece of mind.


I understand that this is the case, but in many circumstances the accident excess reduction offered by car rental companies has limitations (such as a crack in the windscreen is excluded) and doesn’t necessarily reduce the excess to zero. Our own recent use of a rental car in Tassie, the excess could only be reduced to $1100 (cheaper option) to $550 (most expensive option). We decided it was far better to take out domestic travel insurance which had a zero car rental excess and also was substantially cheaper than that offered by the car rental company.

I suppose one has to decide what is lower risk, say reducing an excess from say $4000 to $1100/550 expensively through a car rental company and still having to pay a considerable excess OR paying less, incurring a potential $4000 amount on ones credit card which may be fully reimbursed by a independent travel insurance company…or taking out independent insurance which could be cheaper. maybe not as convenient and may reduce the excess to $0.

Even if one say pays a few months interest on the $4000 until the claim is paid, one would still be very much ahead with an independent insurance as the excess may be reduced to zero (rather than still being lumped with a higher rental car excess charge).

I would prefer a temporary hit to the credit card rather than still be charged a relatively high excess from a car rental company…or still charging what they like claiming that the particular damage is excluded from cover. One needs to weigh up what it right for their own circumstances and what level of risk one chooses to accept.

One should also not have to feel threatened by the insurance sales tactics on collection of a rental vehicle…as a significant amount of pressure is placed to get one to sign up to their insurance.

If one has time to plan a car rental (say more than an hour or so), then it is best to weigh up all options to see what it the best option for ones own circumstances.


You covered it well, noting that everyone does not have the luxury of being able to ride a $4,000 charge on their card on top of their regular purchases. If you only have a $6,000 limit (or less) it would pay to have your eyes wide open on how it works if there is damage or an accident. If one uses a debit not credit card for a rental it is yet again another set of issues to contend with.


This is the issue, if you just buy directly from the car company, you can at least hand back the keys knowing you (hopefully) aren’t going to have a fight about whether some scratch or dent was there beforehand. They certainly take advantage of the fact that you don’t want to have circa 4k frozen on your card that you then have to try to reclaim from a third party.
My main gripe, however, is with the shonky rental cars website (as opposed to Thrifty) for pressuring you to buy the “full coverage” insurance in the first place.*

  • I knew there was a catch! I just couldn’t remember the details and I was under (probably fake) time pressure so I paid it anyway. The person I am most angry with is myself!