Cheap Rental Car Insurance in 2025 (Earn Savings With These 10 Companies!)
State Farm, Erie, and Farmers are the top providers for cheap rental car insurance, offering rates as low as $44 per month. These companies are recognized for their affordable rates, comprehensive coverage, and excellent customer service. Discover how these leading companies provide rental car insurance solutions.
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Daniel Walker
Licensed Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Insurance Agent
UPDATED: Jul 4, 2024
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Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Jul 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
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The top picks overall for cheap rental car insurance are State Farm, Erie, and Farmers, offering rates as low as $44 per month. These companies are recognized for their affordable rates, comprehensive coverage, and exceptional customer service.
Whether you’re covered by your current policy or need to purchase additional insurance, understanding your options can save you money. Learn how to find the best rental car insurance solutions to fit your needs and budget.
Our Top 10 Company Picks: Cheap Rental Car Insurance
| Company | Rank | Monthly Rates | A.M. Best | Best For | Jump to Pros/Cons |
|---|---|---|---|---|---|
 | #1 | $44 | B | Local Agents | State Farm |
 | #2 | $45 | A+ | Personalized Service | Erie |
 | #3 | $46 | A | Comprehensive Coverage | Farmers |
 | #4 | $47 | A | Customer Service | American Family |
 | #5 | $48 | A+ | Customer Service | Nationwide |
 | #6 | $49 | A+ | Comprehensive Coverage | Allstate |
 | #7 | $50 | A++ | Safe-Driving Discounts | Travelers |
 | #8 | $51 | A++ | Tailored Policies | Chubb |
 | #9 | $52 | A+ | Bundling Discounts | Progressive |
 | #10 | $53 | A | Safe-Driving Discounts | Liberty Mutual |
Understanding your car insurance policy can help you determine whether or not you’ll need to purchase additional coverage.
Affordable car insurance rates are just a click away. Enter your ZIP code into our free quote tool above to find the best policy for you.
- State Farm is a top pick for cheap rental car insurance
- Find cheap rental car insurance with rates starting at $44/month
- Discover coverage options to meet your rental car insurance needs
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#1 – State Farm: Top Overall Pick
Pros
- Bundling Policies: State Farm offers significant discounts for bundling multiple insurance policies.
- High Low-Mileage Discount: State Farm provides a substantial discount for low-mileage usage.
- Wide Coverage: State Farm offers various coverage options tailored for different business needs. Unlock details in our State Farm car insurance review.
Cons
- Limited Multi-Policy Discount: The multi-policy discount of State Farm is not as high compared to some competitors.
- Premium Costs: Despite discounts, State Farm’s premiums might still be relatively higher for certain coverage levels.
#2 – Erie: Best for Personalized Service
Pros
- Customer Service: Erie is known for its exceptional personalized customer service.
- Competitive Rates: Offers some of the most competitive rates in the industry. Learn more in our Erie car insurance review.
- Comprehensive Coverage Options: Erie provides extensive coverage options tailored to individual needs.
Cons
- Limited Availability: Erie operates in a limited number of states, restricting access for some customers.
- Digital Experience: Erie’s online tools and digital experience are not as advanced as some competitors.
#3 – Farmers: Best for Comprehensive Coverage
Pros
- Extensive Coverage Options: Farmers offers a wide range of comprehensive coverage options.
- Customizable Policies: Provides highly customizable policies to suit various needs.
- Good Customer Service: Known for reliable customer service and support. Learn more in our Farmers car insurance review.
Cons
- Higher Premiums: Farmers’ premiums can be higher than those of some competitors.
- Discount Limitations: Discounts might not be as extensive or impactful as those offered by other companies.
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#4 – American Family: Best for Customer Service
Pros
- Excellent Customer Service: American Family is recognized for its outstanding customer service.
- Wide Range of Discounts: Offers a broad range of discounts to help lower premiums.
- Comprehensive Coverage: American Family car insurance review provides comprehensive coverage options for various needs.
Cons
- Availability: Limited availability in some regions.
- Premium Costs: Premiums may be higher compared to other providers offering similar coverage.
#5 – Nationwide: Best for Customer Service
Pros
- Strong Customer Service: Nationwide is highly rated for its customer service.
- Flexible Coverage Options: Offers flexible coverage options to meet diverse needs.
- Good Claims Process: Known for a straightforward and efficient claims process. Check out insurance savings in our complete Nationwide car insurance discount.
Cons
- Higher Rates: Monthly rates can be higher than some competitors.
- Discounts: Some discounts are less competitive compared to other providers.
#6 – Allstate: Best for Comprehensive Coverage
Pros
- Comprehensive Coverage: Allstate offers extensive and comprehensive coverage options.
- Multiple Discounts: Provides a variety of discounts to help reduce premiums. Discover more about offerings in our Allstate car insurance review.
- Strong Financial Rating: Rated A+ by A.M. Best, indicating strong financial stability.
Cons
- Premium Costs: Allstate’s premiums might be higher than those of other companies.
- Customer Service Variability: Customer service experiences can vary by location.
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#7 – Travelers: Best for Safe-Driving Discounts
Pros
- Safe-Driving Discounts: Travelers offers substantial discounts for safe driving.
- Strong Financial Rating: Rated A++ by A.M. Best, showing excellent financial strength.
- Comprehensive Coverage: Offers a wide range of coverage options. See more details on our Travelers car insurance review.
Cons
- Premiums: Higher premiums compared to some competitors.
- Limited Local Agents: Fewer local agents available for personalized service.
#8 – Chubb: Best for Tailored Policies
Pros
- Custom Policies: Chubb provides highly tailored insurance policies.
- Strong Financial Rating: Rated A++ by A.M. Best, ensuring financial stability.
- High-Value Coverage: Offers high-value coverage options, especially for luxury items. Read thoroughly our guide titled “Best Insurance for Luxury Cars.”
Cons
- Premium Costs: Chubb’s premiums can be higher due to the tailored nature of their policies.
- Availability: Limited availability in certain regions.
#9 – Progressive: Best for Bundling Discounts
Pros
- Bundling Discounts: Progressive offers significant discounts for bundling multiple policies.
- User-Friendly Digital Tools: Provides excellent digital tools and online resources.
- Wide Range of Coverage: Offers a wide variety of coverage options. Delve into our evaluation of Progressive car insurance review.
Cons
- Customer Service: Mixed reviews on customer service experiences.
- Premium Variability: Premiums can vary significantly based on location and individual circumstances.
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#10 – Liberty Mutual: Best for Safe-Driving Discounts
Pros
- Safe-Driving Discounts: Liberty Mutual offers good discounts for safe driving.
- Comprehensive Coverage: Liberty Mutual car insurance review provides a wide range of coverage options.
- Strong Financial Stability: Rated A by A.M. Best, indicating solid financial health.
Cons
- Higher Premiums: Monthly premiums tend to be higher compared to some competitors.
- Discount Limitations: Discounts may not be as extensive or impactful as those offered by other companies.
Car Rental Insurance
You know that in order to legally drive, you’re required to meet at least the minimum liability car insurance coverage set by the state in which you’re driving. What is liability coverage?
So do you need car rental insurance? Which rental car insurance providers should you consider purchasing insurance from? Does your car rental company offer insurance? Is rental car insurance worth it? Keep reading to find out the answers to these and other questions regarding insuring your rental car.
Make no mistake, you will be asked if you want insurance for your rental car. Yearly car insurance for rental cars is not typically available. Instead, it’s usually charged by the day or the week. Here are some daily car rental insurance rates by company:Rental Car Insurance Daily Rates by Company
| Rental Car Company | Loss Damage Waiver (LDW) | Supplemental Liability Insurance (SLI) | Personal Effects Insurance (PEC) |
|---|---|---|---|
| ACE | $15 | $11 | $10 |
| Alamo | $17 | $13 | $12 |
| Avis | $13 | $12 | $11 |
| Budget | $13 | $12 | $11 |
| Dollar | $16 | $11 | $10 |
| Enterprise | $13 | $13 | $12 |
| Hertz | $13 | $12 | $11 |
| National | $17 | $13 | $12 |
| Thrifty | $16 | $11 | $10 |
Read more:
- Budget Rental Car Insurance Review
- Hertz Rental Car Insurance Review
- National Rental Car Insurance Review
As you can see, rates vary by company, and even for a given company, daily rates can vary by as much as $20.
Cost of Rental Car Insurance
Rental Car Insurance Monthly Rates by Coverage Level & Provider
| Insurance Company | Minimum Coverage | Full Coverage |
|---|---|---|
| Allstate | $49 | $96 |
| American Family | $47 | $92 |
| Chubb | $51 | $100 |
| Erie | $45 | $90 |
| Farmers | $46 | $93 |
| Liberty Mutual | $53 | $105 |
| Nationwide | $48 | $95 |
| Progressive | $52 | $98 |
| State Farm | $44 | $88 |
| Travelers | $50 | $97 |
Full coverage rates are higher, ranging from $88 to $105 per month. Again, State Farm offers the most affordable full coverage at $88 per month, while Liberty Mutual tops the list at $105 per month. These rates highlight the importance of comparing different providers to find the best deal.
Companies like Erie, Farmers, and American Family also provide competitive rates for both minimum and full coverage, making it essential for consumers to evaluate their options based on their specific needs and budget. By understanding these cost differences, consumers can make informed decisions to secure the most cost-effective rental car insurance.
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Rental Car Insurance Definitions
Asking, “Do I need supplemental liability insurance when renting a car?” is smart. That’s because rental car insurance is slightly different from your current policy. The rental car insurance agency usually offers coverage slightly above the average minimum car insurance required by state. Otherwise, there are strong similarities. The rental agency offers coverage in different terms than what the driver is used to, such as:
- CDW: Collision damage waiver
- LDW: Loss damage waiver
- PAE: Personal accident and effects
Although different terms are used, they basically cover some of the same things with limitations in terms and conditions. According to the Insurance Information Institute, a loss damage waiver (LDW) covers you from liability if a car is damaged in any way or stolen. There are limitations, however, and if the damage is the result of poor driving (like speeding, for example), the waiver may be voided.
Supplemental liability insurance protects you from lawsuits by victims of accidents involving a rental.
When you buy rental car insurance, you need the proper amount of coverage. Multiply the daily rate for coverage by the number of days you’re going to have the car, and you can see how expensive rental car insurance can be.
But don’t worry, just follow these simple steps detailed below, and you’ll know the answer to the question, “Do you want insurance with your rental today?” before you even step to the counter. And maybe even be able to negotiate cheap rental car insurance rates. Read our car insurance guide if you want even more information.
Step One: Personal or Business Use
If you’re renting your car on business, you may be covered under your company’s insurance policy, in which case you likely won’t need to worry about the rental car business insurance costs.
Before you leave, find out from your corporate travel department if car rental insurance is covered. It’s possible that you may need to be added to the policy by providing a photocopy of your driver’s license. Your company has to have some type of insurance, so it pays to find out. If your trip is personal, read on.
Step Two: Current Insurance Coverage
You may ask yourself, “Do I need rental car insurance if I have car insurance?” You’re already paying for car insurance because that’s the law. Find out if your car insurance policy covers rental cars. If it doesn’t already, you may be able to get a better deal by adding it to your policy, rather than getting it at the last minute from a rental company. Here are some tips:
- Ask Your Agent: Find out your options from your insurance agent, or go to their website to find out more. If you’re wondering “How do I change car insurance agents?” because your current one isn’t very helpful, looking online or asking around is a good start.
- Look Into Non-Owner Insurance: If you don’t own a car, it is possible to get non-owner auto insurance through your standard insurance provider
- Check Your Homeowner’s Policy: Since it is usually cheaper to buy all of your insurance as a package with one insurer, you may save money buying rental insurance. Check into bundling policies for car and home insurance for more savings.
Make sure you check all the insurance policies that you have since you may be covered and not even know it. Read more:
- Can I use my own car insurance when renting a car?
- Progressive Car Rental Discounts 2023
- Alamo Rental Car Insurance Review
- Thrifty Rental Car Insurance Review
- Enterprise Rental Car Insurance Review
Step Three: Credit Card Coverage
Which credit cards offer rental car insurance? Many credit card companies offer car rental insurance as a benefit. This is most commonly found on cards that offer regular benefits as part of an annual fee—American Express is the best-known example (For more information, read our “Credit Card Car Insurance Discounts“).
To find out if your card offers car rental insurance, just call the phone number on the back of the card.
Make sure you go beyond just asking if rental insurance is offered, however. Sometimes these car rental policies are just secondary to regular insurance, such as supplemental liability. Find out what and how much coverage you have before you hang up the phone with customer service.
Step Four: Loyalty Programs
Just like airlines, car rental companies have loyalty rewards programs. Along with the programs come special benefits like rental car insurance for good rates, or as part of an annual fee. If you’re a power traveler — or are planning to become one — find out whether these loyalty programs can benefit you. You’ll probably be surprised by the perks and not just rental insurance benefits (For more information, read our “Compare Best Car Insurance Companies That Offer Insurance for Car Rental Businesses“).
This is especially true if you plan on renting cars in another country. Sometimes it’s easier to work with the rental company than with your own insurer since they will be more familiar with the laws regarding insurance in that particular country. If you’re renting a car out-of-state and are wondering about rental car insurance, insurance rules should stay the same as the state where you are from.
Step Five: Saving Money on Car Rental Insurance
At this point, if you’re not covered by the steps above, you need to accept some insurance from the rental company, or a third-party rental car insurance company, to make sure there are no out-of-pocket expenses if something happens to your car.
It’s possible that your existing insurance policy already offers the supplemental liability insurance benefit, so if you must have some sort of collision car insurance, go with the loss damage waiver.
The car rental company is likely going to offer you various levels of coverage; just take the cheapest one that will cover you from common scratches and dings. Finally, of course, drive carefully. The best way to save money on insurance is not to get into any accidents.
Cheap Rental Car Insurance in a Foreign Country
With an international driver’s license, you can rent and drive a car anywhere in the world. This benefit comes in handy for business travelers who want to be self-sufficient while traveling abroad. Comprehensive car insurance for driving abroad may have different provisions although the basics are the same.
When an accident happens abroad, many rental agencies try to have the driver pay for damages up front with the promise to reimburse the driver later. This can be a nightmare for some. Because laws differ from one country to another, there may be slight differences in what is offered.
Most personal car insurance companies cover the rental and the driver abroad, although it is best to ask before the assumption is made (Read more: Compare International Car Insurance: Rates, Discounts, & Requirements).
Case Studies: Success With Cheap Rental Car Insurance
Discover how finding the right rental car insurance can lead to significant savings and peace of mind. These case studies highlight real-life examples of individuals who benefited from top providers.
- Case Study #1 – Saving With State Farm: John, a frequent traveler, found himself spending too much on rental car insurance. After comparing rates, he switched to State Farm, which offered comprehensive coverage at just $44 per day. This change saved him over $200 on his month-long trip and provided better coverage.
- Case Study #2 – Personalized Service With Erie: Emily needed rental car insurance for a cross-country move. Erie provided personalized service and tailored coverage, ensuring she was fully protected for her specific needs. With rates lower than her previous provider, Emily saved money and felt secure during her journey.
- Case Study #3 – Comprehensive Coverage With Farmers: Mark, a business traveler, required extensive coverage for his frequent car rentals. Farmers offered the best combination of affordability and comprehensive protection. By choosing Farmers, Mark reduced his daily insurance costs and enjoyed enhanced coverage features.
These case studies illustrate the benefits of choosing the right rental car insurance provider.
State Farm offers the best combination of affordable rates and comprehensive rental car insurance coverage.
Daniel Walker Licensed Insurance Agent
Whether you need affordability, personalized service, or comprehensive coverage, companies like State Farm, Erie, and Farmers can meet your unique needs and help you save. Explore our comprehensive guide titled “Compare Comprehensive Car Insurance: Rates, Discounts, & Requirements.”
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The Bottom Line: Compare Car Rental Insurance
Frequently Asked Questions
How does rental car insurance differ from personal car insurance?
Rental car insurance typically offers coverage above the state-required minimums. While there are similarities, rental car insurance may have different terms and conditions, such as collision damage waivers (CDW), loss damage waivers (LDW), and personal accident insurance (PAE).
To learn more, explore our comprehensive resource on “Understanding Car Accidents.”
Do I really need car rental insurance?
Whether you need car rental insurance depends on your personal circumstances. If you already have a car insurance policy, it may provide coverage for rental cars. Additionally, some credit cards offer car rental insurance as a benefit. It’s important to check with your car insurance provider and credit card company to understand your existing coverage.
Find cheap car insurance quotes by entering your ZIP code below.
Is business insurance for car rental firms required?
Yes, typically car rental firms need commercial auto insurance in addition to general liability coverage. Commercial coverage helps meet state requirements and covers the fleet of vehicles being rented out.
Can I get last-minute car insurance?
Yes, you can obtain car insurance quickly by calling an insurance company or getting an online quote. However, it’s advisable to give yourself a little more time to shop around so you can get better rates by comparing multiple options.
To find out more, explore our guide titled “Factors That Affect Car Insurance Rates.”
Does travel insurance cover rental car insurance?
Since rental car insurance is not a common coverage of travel insurance, you have to check with each specific travel insurance company. If they do offer rental car insurance, it may be limited to only certain travel insurance plans. For example, Allianz Travel offers OneTrip Rental Car Protector for an additional $11 per day.
How can I save money on car rental insurance?
To save money on car rental insurance, check if your existing car insurance policy covers rental cars, explore non-owner car insurance, consider bundling rental insurance with your homeowner’s policy, use car rental loyalty programs, select the cheapest coverage option that meets your needs, and drive carefully to avoid accidents.
How do I know if my credit card covers car rental insurance?
To find out if your credit card offers car rental insurance, you can call the phone number on the back of your card and inquire about the coverage. Be sure to ask about the specific coverage details and any limitations or exclusions.
Access comprehensive insights into our guide titled “What is considered good car insurance coverage?“
What is a loss damage waiver (LDW)?
A loss damage waiver (LDW) is a type of car rental insurance that covers you from liability if a rental car is damaged or stolen. However, it may have limitations, and certain actions like poor driving (e.g., speeding) can void the waiver. LDW is often offered by car rental companies as an option to reduce your financial responsibility in case of damage or theft.
How can I obtain free rental car insurance quotes?
You can enter your ZIP code into our free quote tool to compare rental car insurance quotes from top companies. Comparing quotes allows you to find the best rates and coverage options that suit your needs. Delve into our guide “How do you get competitive quotes for car insurance?”
Can I get cheap rental car insurance for international travel?
Yes, with an international driver’s license, you can rent and drive a car abroad. Check if your car insurance or credit card covers international rentals, or consider travel insurance plans that include rental car coverage. By entering your ZIP code below, you can get instant car insurance quotes from top providers.
Free Car Insurance Comparison
Enter your ZIP code below to view companies that have cheap car insurance rates.
Secured with SHA-256 Encryption
Daniel Walker
Licensed Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
