I have been renting cars in the Azores for 30 years and hesitate to make a recommendation for Sao Miguel, or any island. All of the agencies have reviews that would sway a visitor to choose elsewhere. There are many factors that go into my decision on every trip. I always use due diligence when renting from any of them, and it appears you do the same!
Many times the very low rates you see are true and available, albeit with a large deposit. The deposit never dissuades me. A zero deductible insurance is certainly what I recommend on any island in the Azores. Factor this cost into your rental for peace of mind. However you purchase this policy does not matter. The easiest method is directly with the company you are renting from, either when making the reservation, or at the counter. You will simply hand over the keys at the drop-off and walk away. Every other method will involve you needing to pay for the damage up front, and then submit a claim and get reimbursed from the company that has issued your policy. That will involve time and aggravation, but probably will be cheaper than what is offered by the car rental company. If using your credit card, always read what is specifically covered, and more importantly, NOT covered. I recently found out that many credit cards do not cover any liability for injuries or damage to anything BUT the car. That could be a very costly catastrophe in most cases!
I have rented with Sixt at the airport location in Ponta Delgada, and would personally have no issues doing it again.
Everything you need to know about renting cars in the Azores is in the free section of my Azores guide. The is no obligation to purchase the entire guide. The webmaster wrote a post at the top of this Portugal forum with a link referring to it.
I am always available for any Azores questions you have. :-)
