Getting rental car insurance from a vendor other than your car rental company may complicate claims and present more headaches than it's worth. It’s all in the fine print—if you can find it.
I have spent 39 years working in the travel industry, writing about travel, and advocating for travelers, but just like everyone, I still get caught off guard by consumer gotchas. No matter how much I know about travel, there are always new hurdles to overcome.
I made a new discovery on a road trip vacation last week after I thought I had properly purchased car rental insurance protection. The coverage I booked through Expedia turned out not to work for the rental car company I chose.
How travel booking sites sell you insurance
For my trip, I had shopped online before booking a 6-day rental of a compact car from Thrifty on Expedia for $229.23, including all mandatory taxes and fees. I knew I would be driving quite a bit—more than 1,000 miles throughout the Southwest—so I thought it best to buy insurance coverage, and I opted for the “rental car protection” option that popped up during the booking.
The policy was flagged by Expedia as “Highly recommended” and it even required a mandatory opt in/opt out before my booking could even be completed.
I selected the package that included coverage for “certain theft, vandalism, and collision damage” for $10.00 per day, totaling $60.00. Therefore, my total charge, car and insurance, would be $289.23.
Imagine my surprise when I arrived at the rental counter in San Antonio. (After a one-hour wait to speak to someone—but that’s a complaint for another day.) The agent politely asked if I would like to purchase insurance coverage.
I told her I already had.
She shook her head and quoted me the rate of $229.23, which didn’t include the insurance I had bought.
I retrieved the printed copy of the AIG/Travel Guard policy confirmation (pictured below), proving that I had paid Expedia $60.00 for daily coverage.
She explained that no, this was “third-party” coverage, and it was not fully recognized by Thrifty.
What “third-party” insurance coverage really means
Rental car desks sell Collision Damage Waivers (CDW) and Loss Damage Waivers (LDW) that are just that: agreements that waive your responsibility after accidents or other mishaps. As the car rental company Thrifty noteson its site, in most cases purchasing them will mean you won’t have to file a claim or pay a deductible in case of damage. In simple terms, if you buy it from Thrifty, you can walk away. (Or fly away.)
The agent broke it down:
Yes, the coverage would apply in the unfortunate case of an accident, theft, etc.
But…Thrifty would not waive my responsibility as it would have done with a damage waivers that it had issued itself.
In other words, if I had an accident with my third-party coverage, I could not just “walk away.” The burden would still be on me to sort everything out.
I would still have to personally perform as a go-between for a complicated tangle of parties that would include Hertz/Thrifty (which rented the car), Expedia (which sold the rental and the insurance), and AIG/Travel Guard (the insurer behind the box that I’d clicked), plus anyone else who might be involved.
So let’s lay out the problem here. If you are using your own coverage for a rental (via a credit card or your existing personal insurance policy), then you’re accepting that in the case of an accident, you agree to work through any settlements with your bank or insurance company all by yourself.
If I had been involved in even a minor accident during this rental, any damage to my rental car would not have been waived by Thrifty on the Expedia policy—but it would have been waived had I purchased a policy directly from Thrifty.
In theory, if the accident was complicated, I could be tied up for weeks or months trying to figure out on paperwork and settlements and chase down customer service representatives.
You’d have thought that the coverage Expedia sold me would have prevented that. The whole point of purchasing a rental waiver, you'd think, is to waive away negotiations, settlements, and administrative hoops.
I learned my lesson. The next time I book CDW or LDW, I’ll purchase such waivers directly through the rental firm.
Before I left the counter, as if to drive home the mistake I made, the agent had me sign an agreement showing I had “declined” all four of Thrifty’s insurance products.
That night, I double-checked my credit card account and found the rental charge of $229.23 had been debited by Thrifty's parent company Hertz, while the insurance charge of $60.00 had been debited separately by Expedia. Indeed, the insurance I bought was not from Thrifty itself.
What the travel booking sites don't tell you about insurance
Whenever I encounter travel industry problems on the road, I always try to reverse-engineer to see what I—and others—can learn.
Unfortunately, in this case Thrifty’s website was not much help. I thoroughly searched and could find no mention of insurance waivers, let alone mentions of third-party booking site waiver policies. The site’s “Extras & add-ons” page only details child seats and disabled driver assists.
I had to leave the rental car company’s site and use a search engine to locate the info on Thrifty’s site.
Of course, if I had chosen to book via Thrifty.com, then during the booking process I would have been offered several insurance options, ranging from $7.51 to $34.99 a day for a compact car. But finding that info in advance of actually booking isn’t easy.
The site of Thrifty’s corporate parent Hertz offers better info on insurance products. And Hertz does a good job explaining how personal auto insurance policies and/or credit card coverage may or may not be adequate for rentals.
But renters don’t do a good job of explicitly warning you that third-party booking sites may present challenges.
And what of Expedia? Well, a web search will lead you to a handy page on Expedia.com entitled “Demystifying car rental insurance.” It’s a detailed and helpful guide to the very Travel Guard product I purchased. But it still does not address purchasing rental coverage through third-party sites.
Finally, I also followed up with AIG/Travel Guard. But there, too, there was no warning about car rental companies not recognizing outside waivers.
Should you buy insurance from Expedia or similar booking sites?
Rental car insurance can make a lot of sensein some cases, but not in others. What’s more, itdiffers considerablyfrom the auto insurance you might have on your own personal vehicles at home.
• If you’re purchasing an insurance waiver during any booking process, then make sure it will truly waive any post-travel hassles. That might mean that you have to buy such coverage directly through the rental firm, not through a third party.
• Don’t wait until you’re standing on a (likely very long) line at the counter to consider your options. There are instances where your own credit card, car insurance, and even home insurance coverage may be adequate, and other times when buying coverage makes sense. Research this in advance, especially since some rental agents are incentivized to both scare you and upsell you at the counter.
Thankfully, my 1,129-mile trip was free of problems and the rental insurance wasn’t needed in the end. But it’s 2024, and online travel bookings seem to be getting more—rather than less—complicated.
Add third-party car rental insurance to the growing list labeled caveat emptor—“let the buyer beware.”
William J. McGee is the Senior Fellow for Aviation & Travel at American Economic Liberties Project. An FAA-licensed aircraft dispatcher, he spent seven years in airline flight operations management and was Editor-in-Chief of Consumer Reports Travel Letter. He is the author of Attention All Passengers and teaches at Vaughn College of Aeronautics. There is more at www.economicliberties.us/william-mcgee/.
