Rental Car Insurance Market Report 2025

The rental car insurance market size has grown strongly in recent years. It will grow from $9.88 billion in 2024 to $10.59 billion in 2025 at a compound annual growth rate (CAGR) of 7.1%. The growth during the historic period can be attributed to rising travel demand, an increase in rental vehicle bookings, escalating repair and replacement costs, greater consumer awareness of risks, and the implementation of mandatory regulatory insurance requirements.

The rental car insurance market size is expected to see strong growth in the next few years. It will grow to $13.77 billion in 2029 at a compound annual growth rate (CAGR) of 6.8%. The growth in the forecast period is expected to be driven by rising demand for rental cars, an increase in corporate travel volumes, expansion of insurance services, longer rental durations, and the growth of electric vehicle rentals. Key trends in the forecast period include advancements in digital and mobile booking platforms, the integration of artificial intelligence applications, adoption of usage-based and telematics pricing models, innovations in Insurtech and online distribution, and collaborations with car-sharing and mobility services.

The increasing demand for rental vehicles is expected to drive growth in the rental car insurance market. Rental vehicles, which are automobiles temporarily hired for personal or business use through rental service providers, are gaining popularity due to a shift toward flexible mobility solutions. More consumers, especially in urban areas, are opting to avoid the high costs and responsibilities of car ownership. Rental car insurance supports this trend by offering financial protection during the rental period, making the service more appealing and reliable. For example, Statistics Canada reported that tourism-driven demand for rental vehicles rose by 13.5% in the first half of 2024 compared to the same period in 2023. Consequently, this growing rental vehicle demand is propelling the rental car insurance market forward.

Key players in the rental car insurance market are focusing on innovative digital solutions, such as app-based insurance platforms, to improve convenience, operational efficiency, and real-time policy access. These platforms enable users to purchase coverage, manage policies, and file claims without paperwork or location constraints. For instance, in May 2023, AXA Hong Kong & Macau launched Klook Rental Car Protection in collaboration with Klook. This product provides rental car excess coverage up to $5,376 (HKD 42,000) and personal accident protection up to $15,380 (HKD 120,000). It also offers benefits such as reimbursement for lost travel documents, compensation for non-refundable rental fees due to flight delays, and automatic policy extension. Customers can easily manage policies and claims through the Emma by AXA mobile app, delivering a fully digital insurance experience for travelers abroad.

In July 2024, Priceline.com LLC, a US-based travel technology firm, partnered with Cover Genius to introduce enhanced travel protection. Through this collaboration, Priceline integrated Cover Genius’s global distribution platform, XCover, to offer seamless travel protection for flights, hotels, rental cars, and packages. The service improves user experience with instant claims processing, multilingual support, and AI-driven policy matching. This partnership also aims to increase insurance attach rates and foster customer loyalty across North American markets. Cover Genius Inc. is a US-based Insurtech company.

Major players in the rental car insurance market are Berkshire Hathaway Inc., Allianz SE, AXA Assistance S.A., American International Group Inc., Allstate Insurance Company, Liberty Mutual Insurance Company, The Progressive Corporation, Chubb Limited, The Travelers Companies Inc., Mapfre S.A., Enterprise Holdings Inc., Avis Budget Group Inc., The Hertz Corporation, Generali Global Assistance Inc., Europ Assistance Holding S.A., Budget Rent A Car System Inc., Sixt SE, Dollar Thrifty Automotive Group Inc., State Farm Mutual Automobile Insurance Company, and Nationwide Mutual Insurance Company.

North America was the largest region in the rental car insurance market in 2024. The regions covered in rental car insurance report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the rental car insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s recommendations and conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the financial sector, particularly in investment strategies and risk management. Heightened tariffs have fueled market volatility, prompting cautious behavior among institutional investors and increasing demand for hedging instruments. Banks and asset managers are facing higher costs associated with cross-border transactions, as tariffs disrupt global supply chains and dampen corporate earnings, key drivers of equity market performance. Insurance companies, meanwhile, are grappling with increased claims risks tied to supply chain disruptions and trade-related business losses. Additionally, reduced consumer spending and weakened export demand are constraining credit growth and investment appetite. The sector must now prioritize diversification, digital transformation, and robust scenario planning to navigate the heightened economic uncertainty and protect profitability.

Rental car insurance consists of specialized protection plans that cover financial risks related to renting vehicles, such as damage, theft, personal injury, and third-party liabilities. These insurance options help travelers manage unexpected expenses, protect their personal finances, and meet legal or rental contract requirements.

The primary types of rental car insurance include collision damage waiver (CDW), liability insurance, personal accident insurance, theft protection, and supplemental liability insurance (SLI). Collision damage waiver (CDW) covers repair costs for damage to the rental vehicle caused by a collision, usually relieving the renter of financial responsibility. Rental periods can be short-term or long-term, with insurance offered through both online and offline channels. The main end users are individuals and commercial clients.

The rental car insurance market research report is one of a series of new reports that provides rental car insurance market statistics, including the rental car insurance industry global market size, regional shares, competitors with the rental car insurance market share, detailed rental car insurance market segments, market trends, and opportunities, and any further data you may need to thrive in the rental car insurance industry. This rental car insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The rental car insurance market includes revenues earned by entities by providing services such as roadside assistance, personal effects coverage, loss damage waiver, emergency medical coverage, and travel disruption coverage. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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