What Is Third Party Insurance In Car Rental

Have you heard of third-party car rental insurance? Learn what it covers when renting a car.

It safeguards you from damaging someone else’s property, like your neighbor’s car, similar to a real-life example with a brick.

Wondering how this applies to car rentals?

Third party insurance
What is third party liability insurance car rental: Photo source (Insuranks)

What is a third party rental car insurance?

A third party insurance in car rental can cover damage caused to anyone or anything apart from you and the rental car itself.

In the event of an accident, for example, it can cover damage done to the other car involved, the passengers inside it, or to other people’s property.

Also read: How much liability insurance do schools need?

Also, you should know there are many different names for the third party insurance, such as:

  • EP – Extended Protection
  • LP – Liability Protection
  • SLI – Supplemental Liability Insurance
  • TPL – Third Party Liability
  • ALI – Additional Liability Insurance

Different rental companies in different parts of the world may refer to it in a particular way and maybe have slightly different coverages, but they all protect the third party involved in the incident.

What does the third party liability cover?

Here’s a list of things third party insurance can cover:

  • The cost of repairing any damage done to third party property (e.g.: a fence)
  • The cost of repairing any damage done to the other car involved in the accident
  • The cost of third party injury (e.g.: medical bills and costs in general)
  • The cost of legal fees

Please note that, as we’ve mentioned above, these insurances may have different names and cover third parties to different extents.

What doesn’t the third party liability cover?

  • Damage done to the rental car
  • Damage or loss in valuables inside the rental car
  • Renter or renter’s passagers injury
  • Car theft

Basically, the third party insurance won’t cover anything related to the rental car itself. There are different insurances for that, such as Collision Damage Waiver (CDW), Loss Damage Waiver (LDW) and Collision Damage Insurance (CDI) — which can be bought separately.

Should I get Third Party insurance?

Car rental insurance is a wise precaution, especially as unexpected situations can arise.

It’s a good idea to purchase it for peace of mind, but check if your regular car insurance covers third-party damage for rentals.

In many countries, third-party liability coverage is legally required, but the minimum coverage in the US can be low.

Some rental companies offer supplemental liability insurance with higher coverage:

  • Alamo’s Extended Protection (EP): $1 million
  • Dollar’s Liability Insurance Supplement (LIS): $1 million
  • Enterprise’s Supplemental Liability Protection (SLP): $1 million
  • National’s Supplemental Liability Insurance (SLI): $1 million

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