Protect Your Excess

Renting a car has never been easier, once you understand all the terminology surrounding insurance. Each car rental company seems to have its own terms to describe their insurance cover. The most commonly used terms are Collision Damage Waiver / Loss Damage Waiver (CDW/ LDW), Supplemental Liability Insurance (SLI), Excess, Rental Car Excess Insurance, Excess Waiver, the Deductible and so on.

Essentially it’s similar in part to the private motor insurance you would take out for your own car. CDW and LDW are terms used interchangeably and together with theft, they cover you against the risks to the rented car through theft or damage caused in an accident. Although CDW will cover damage to the vehicle or its theft, it typically will not cover the theft of the vehicle’s contents.

If you are concerned about the contents of the vehicle, there are insurance policies that will cover this. It is also important to remember that many CDW policies will carry conditions that may exclude cover for damage to the roof, undercarriage, tyres windows or windscreen of the car.

All UK car rental companies must include by law unlimited Third Party cover as a mandatory part of the agreement. In other countries though the third-party cover may be ‘capped’ at a maximum payout level that may be far too low given the risks of high court awards following an accident. SLI is a form of insurance by which this third party insurance can be topped up. SLI is most commonly associated with USA rentals where insurance is optional but where litigation or damage awards may be amongst the highest in the world.

In common with most insurance policies, car rental insurance policies carry excess. The excess is the maximum amount that the renter has to contribute towards the cost of the damage before the insurance company will contribute. So if there is an excess of 600 pounds sterling and the damage amounts to 500 then the renter will have to pay the 500. If the damage on the other had amounts to 750 then the renter will pay 600 and the insurance company will pay 150. Excess levels on policies can range from 500 to as much as 1500 pounds.

Rental car excess insurance provides the renter with cover that pays the excess. For a premium the renter is then protected from incurring potentially very heavy costs in the event of a claim.

All types of car insurance can be purchased directly from the car rental company. These policies are valid only for the duration of the rental. There are alternative sources however that may well be worth considering if you are looking for the most competitive and broadest cover. There are numerous specialist insurance companies and brokers that offer online rental car excess insurance of this type. These companies can offer policies on a daily basis for the duration of the rental or on a longer- term basis such as 12 months. These long-term policies are policyholder as opposed to rental based and this provides cover for the policyholder every time they rent a car within the duration of the policy.

One particular benefit of buying from an independent insurance company is that their rental car excess insurance may cover items normally excluded from many policies. These exclusions include vulnerable and easily damaged parts of the car such as the windscreen, tyres, roof and undercarriage. Purchasing from these companies may give you increased peace of mind at a preferential price!

When looking around for a hire car, many people will check models, prices and special deals, often comparing several car hire companies to find the deal that is right for them. Yet strangely, when thinking about insurance for car rental many people tend not to shop around and take ‘as is’ the insurance sold by the car rental company they have selected.

This may be missing an opportunity and could be wasting money. Contrary to popular belief, the renter is not obliged to pay for the additional insurance offered by car rentals companies and better deals may be available elsewhere.

To look at this, let us think for a second about the insurance for car rental that comes included in the car rental price. In some countries this may be so limited as to be zero. All insurance you require such as third party liability (to cover other parties you may injure in an accident) or CDW (this is insurance against damage to the rented car itself) may have to be purchased separately to the rental cost.

In other countries the rental price may include third party, theft and perhaps even CDW, but this basic cover needs to be examined carefully. It is worthwhile asking whether or not the third party cover is sufficient for your needs because although by law it is unlimited in the UK, in other countries the policy may have a ‘maximum payout’ level specified that could be inadequate. It’s also useful to look at the CDW cover. That’s because typically the basic CDW insurance for car rental provided by a car rental company will exclude several areas of the vehicle from cover such as the tyres, wheels, roof and windows. These are all some of the most commonly and expensively damaged areas of a car even in minor accidents.

It is also highly likely that the basic insurance for car rental that comes from the rental company will carry what’s called excess. The excess is essentially the financial contribution that the renter will have to pay following an accident even if insured. The excess amount will usually be set between 500 and 1500 pounds sterling so if the vehicle is damaged to a cost of 1000 pounds and there is a 500 pound excess on the policy, then the renter will need to pay 500 pounds towards the repair costs.

These gaps in cover can be a serious worry for renters, and the car rental company will very probably try to sell additional or ‘top-up’ insurance to do things such as reduce the excess payable or increase cover to excluded areas of the vehicle etc. This is where many renters just say ‘yes’ and where a little shopping around may save money.

The additional top-up insurance offered by car rental companies can be expensive and significantly cheaper alternatives for this insurance can often be found online through specialist insurance companies and brokers. Their policies work on the basis that if you have to pay the rental company excess following an accident, the insurance company will reimburse you. This also applies to things such as covering the excluded areas of vehicles and increasing third party liability cover if necessary.

Insurance for car rental cover offered by the direct insurance companies and brokers also offers flexibility because it is sold to a policyholder and not just a single rental agreement. This means if the renter takes out an annual policy, this would cover them for all rented vehicles driven in that given 12-month period. This could offer flexibility benefits and again, it will probably save significant amounts of money. As an option, it may be worth checking out.

You’ve rented your car and the person behind the desk asks if you want Excess Waiver Insurance. Your inclination is probably to say yes because the car hire company must know best. They wouldn’t ask you if you want it if you didn’t actually need it would they?

Before you make any decisions you need to be sure that you know three important things
• What is excess waiver insurance?
• How much is it?
• Is this a good deal if I go ahead and buy it?

The basic forms of insurance normally considered a minimum safe level when renting a car are third-party, theft and Collision Damage Waiver (CDW). Third-party insurance provides cover should you inure someone or damage their property with the rented vehicle and theft cover is, of course, self-explanatory!

In the event of an accident, CDW provides cover for damage to the rented vehicle. As with most types of insurance the policy may also list some exclusions to the cover, typically the windscreen, tyres, roof and undercarriage, with damage to any of these areas to be paid for by the renter of the vehicle. There will also almost certainly be what is termed excess on the policy. The insurance company will not pay for any damage below the excess. So with an excess of 500 pounds and damage of 750, you would have to pay 500 and the insurers 250. If the value of the damage were 400 you would have to pay it all.

Excess waiver insurance is an agreement with the insurance company that they will ‘waive’ their right to charge you for the excess. They will sell you a policy, with premiums normally priced as an amount per day, which means that they will cover (almost) all of the cost of any damage. The ‘almost’ refers to damage to any excluded items which may not be part of the excess waiver.

The amount of the excess varies from company to company. It will typically be in the range 500-1600 pounds. Excess waiver is a voluntary form of insurance so it is up to the individual to decide whether or not to buy it. You would have to decide whether it is it worth the risk of potentially facing payments of up to 1600 pounds to save on the excess premiums.

To decide whether or not anything that you want to buy is a good deal, you may wish to compare it to what others may be selling. Car hire companies sell these insurances but they are not specialist insurance providers and their prices can be very high compared to other sources. They will normally quote you one price. Even if you have bought your main car insurance from the rental company, there are many independent insurance companies either in the high street or on the Internet who specialise in excess waiver insurance and who may be able to offer more attractive terms.

If you investigate this option and purchase the insurance directly, you can arrive at the car rental desk with your insurance cover in-hand. Excess waiver insurance can be purchased in advance from most of the specialist insurers. Some will offer cover for a period of days or even a year. This means that the policies cover a policyholder for the entire period of the policy and can therefore be used during that period for any number of rentals. The cost savings are usually very significant over the same insurance sold by the car rental companies.

To some extent it is true to say that people rarely concern themselves about the details of their rental car insurance coverage until such time as they have an accident and need to claim!

It would be nice to say that all rental car insurance coverage was the same throughout the world but unfortunately that is not the case and what is covered will vary considerably depending upon the rental company you use and the country you are renting in. These differences are not just trivial or academic – following even a minor accident they could make the difference between slight inconvenience and a major financial catastrophe.

To understand this, it is necessary to start by examining what insurance may be included in the standard rental price. In some countries and through some rental companies this may in fact be little. Each component of insurance will need to be purchased separately. In other cases the vehicle may come with third party liability cover that will protect against claims from third parties that you have injured them or their property with your vehicle.

The vehicle may also include protection against theft and possibly something called CDW (collision damage waiver). CDW is a form of rental car insurance coverage that protects the renter against damage to the rented vehicle. In other words, if you dent it, CDW may pay some of the repair costs.

The problem with the basic insurance that is included by the rental company (or that is purchased from them) is that the cover it provides may not be adequate and this could come as a nasty shock following an accident.

There are several possible risks. One of these is related to the fact that the third-party liability cover may be financially capped at a certain maximum level. In the UK this type of insurance must be unlimited by law but in other countries it may be capped at a level far below the possible awards of a court following injury to a third-party. If there is a difference, it will be the renter that pays.

CDW cover may also be limited in that many areas of the vehicle such as the wheels, tyres and roofs, may in fact be excluded from cover. If they are damaged then once again the renter will pay.

Finally, many rental company insurance policies carry excess – an amount of money that the renter will have to pay towards the cost of any claim even if they have insurance. This can be anywhere between 500 and 1500 pounds sterling.

It is possible to increase the cover available, or reduce the excess, by purchasing additional ‘top-up’ insurance from the rental company but this can prove expensive.

Fortunately there are specialist insurance companies and brokers online and they often provide a cheaper option for broader rental car insurance coverage. These policies are sold to a policyholder for a given period of time and have the advantage of covering all rented vehicles used during the life of the policy. Typically they will also offer wider coverage for other areas of the vehicle that are often excluded by the rental companies and additional third party liability benefits. As the renter is under no obligation to take insurance from the rental company, this option is worth checking out as a way to save money and obtain a better product.

Renting a car can make travel arrangements that bit more convenient or a holiday that much more fun. In fact at times it is essential. Yet many people admit that they are confused and even worried by what they perceive to be the complexities of insurance for rental cars.

This is understandable. The car rental companies have different offers, terms and conditions that all vary by company and frequently by country. Many of these affect the insurance for car rentals and to make matters worse, it is not unusual to see apparently confusing insurance terminology used in their advertisements. Many people will admit to having scratched their head in bafflement when reading in the advertisement things such as the car rental price did (or did not) include ‘collision damage waiver’ or ‘extended third party liability insurance’.

In fact the position is nowhere near as complicated as it may appear on a first reading. The potential renter only really has to keep in mind three things when considering insurance for rental cars:

 What insurance is available for third party liability – in other words how much insurance cover is available for damage caused by the renter and hired car to other people or their property?
 What insurance is available for any damage caused to the rented car itself?
 What exclusions and conditions apply to the policy and critically, what excess does it carry?

It’s worth remembering that although third-party liability cover is unlimited by law on rental vehicles in the UK, in many other countries the maximum amount payable is capped by the policy. Given that court awards following injuries can be very high, a limited cover could prove financially catastrophic for the renter because they will have to pay any difference between the maximum payable by the policy and the court award.

The insurance that covers damage to the rented vehicle itself is often called CDW for collision damage waiver. That is fine, but the basic form of CDW may well exclude damage caused to many areas of the vehicle such as tyres, roof, windows and wheels – all areas that can be easily damaged and expensive to repair and with only basic CDW those repair bills will be coming the way of the renter!

Then there are conditions including the excess. The excess is a financial amount that the car rental company will expect you to pay towards the cost of any damage. Typically the excess will be somewhere between 500 and 1500 pounds sterling, so if the repair costs are 1000 pounds and there is a 500 pound excess then the renter will need to pay that 500 pounds.

Insurance for rental cars can be purchased from either the car rental company or online from a specialist insurance company or broker. Some rental companies will include in the rental price some of the above insurances but they may be ‘limited’ in their protection. It is possible to buy ‘top-up’ insurance from the rental company to reduce the excess or cover other parts of the vehicle, but this can prove expensive.

The insurance for rental cars available online through the specialist insurers and brokers is frequently considerably cheaper. As it covers a policyholder rather than a vehicle, it can be used to cover all cars rented during the life of the policy and this again can generate considerable savings. The cover may well include those areas of the rented vehicle normally excluded by the rental company and offer additional benefits such as increased third-party cover. It may well be worth looking into this further.

When you look for insurance for hire cars, you’ll probably find that the terms you’re familiar with for private car insurance just don’t apply. In their place are things like Collision Damage Waiver (CDW) and Theft, Supplemental Liability Insurance (SLI), Excess, the Deductible etc.

To all intents and purposes, you can probably think of CDW as a form of comprehensive insurance. Therefore CDW and Theft offer cover against damage to or theft of the vehicle.

Car hire in the UK and for many parts of Europe will normally include third-party cover that offers protection should you injure a third-party or damage their property while driving the rented vehicle. This may be limited in terms of the maximum amounts payable and you can choose to increase this amount by purchasing SLI to provide additional financial cover. It is worth noting that court awards to third parties following an accident may be very high so the limits of your cover payout should be carefully checked.

In the USA insurance for hire cars is not mandatory and will not be included in the rental price of the vehicle. Collision Damage waiver and Supplemental Liability Insurance can be purchased separately. The price will be quoted as a daily rate and will significantly increase the cost of the rental. Many find it more cost effective to purchase insurance for hire cars in advance from one of the many independent insurance companies who operate in the UK on the Internet or High Street.

You’ll find that most insurance policies carry excess. The excess is the amount of contribution the insurance company will expect you to make towards the cost of the claim. This can be a fairly substantial amount and varies from insurance supplier to insurance supplier. Typical values for excesses relating to insurance for hire cars can be anywhere between 500 and 1500 pounds. You can take out an insurance policy or waiver to provide you with cover for these excess payments.

Many but not all insurance companies will sell insurance for hire cars that excludes certain areas of the car from cover. These exclusions will typically be the windows, tyres, roof and undercarriage of the vehicle and any damage will have to be paid by the renter.

Insurance for hire cars does not have to be obtained from the car rental company. There are numerous specialist insurance companies in the market place and it may make sense to look at what these independent companies are able to offer before you accept the quote from the car hire company. Many may be able to offer a much more competitive quote better targeted at requirements of the renter.

The car rental company will sell you insurance for the duration of the rental only. Independent insurers can operate in this way as well but many also offer daily or annual policies that can be very cost effective particularly if you know that you are going to rent a car on a number of occasions. Some offer policies that cover areas of the vehicle normally excluded by the rental company’s insurance meaning that damage to those vulnerable areas will be covered.

Whoever you chose for your insurance for hire cars, it is usually a good idea to read the policy detail carefully. Know exactly what you want and what you have paid for. That way in the event of an accident and a claim being made there will be no unexpected surprises!

Having a minor driving accident is always traumatic. It can be even more so if you are driving a rented vehicle that suffers damage because you can find yourself facing a very large repair bill. You are going to have to pay this unless you have taken out something called damage liability waiver.

When you rented the car to begin with, it may have had something included in the price called damage liability waiver (more commonly called collision damage waiver or CDW). If it didn’t, you will probably have been invited to purchase CDW by the car rental company.

Damage liability waiver or CDW, is essentially a form of insurance that looks to protect a car renter against the high costs of repair they will have to pay if they have sustained even minor damage to the rented vehicle. If CDW in place, the damage would be paid for in part by the car rental company’s insurance policy.

The basic form of CDW sold by the car rental companies, or included in the rental price, is useful but it can still leave a renter facing large bills after an accident. That is because the basic CDW sold by car rental companies often excludes cover for areas of the vehicle such as wheels, tyres, roof and windows. These are all parts of a car that are easily and expensively damaged.

Most CDW policies from the car hire companies will also carry excess. The excess is the first financial part of any claim that the renter will be expected to pay out of his or her own pocket – in other words it is a form of ‘contribution’ towards the repair costs. The excess amount on the policy varies widely, but a figure somewhere between 500 – 1500 pounds would be commonplace.

If you are concerned about the risks and possible bills involved, it is possible to offset these by paying a little extra.

Most car rental companies will be very keen to sell you additional ‘top up’ insurance to increase the cover on things such as damage liability waiver. These additional policies can reduce the excess payable and possibly include insurance cover to areas such as the tyres etc. Although sometimes convenient, taking out this type of cover through a rental company can be very expensive.

The online direct insurance companies and brokers offer an alternative option. These offer various forms of car rental insurance and their policies are very different to those of the rental companies because they cover a policyholder and not the hire of an individual car. As they typically are sold for a period of days or even a year, they will cover any vehicles rented during that period and their cover is often broader based and superior to that offered by the car rental companies.

The damage liability waiver cover offered by these companies is frequently considerably cheaper that that purchased from a car hire company. If you are unfortunate to need to pay the car rental company the excess following an accident, then the insurance company will reimburse you through this ‘top up insurance’. This could be a way of saving a lot of money!

Car hire excess waiver is a slightly frightening term used sometimes in discussions around car hire insurance. It may pop-up on the rental documents and to understand what it means one needs to look at the basics of car rental insurance.

In some countries the basic car rental cost includes little or no insurance and this has to be purchased separately at an additional cost. In most countries though, the car rental price will include some forms of basic insurance. Whether the insurance is purchased separately or included in the rental price, it typically will cover third-party liability (i.e. any damage you cause to others with the hire car), theft and some forms of damage to the rented vehicle itself.

The insurance component that covers damage to the rented vehicle is often called collision damage waiver (CDW) or sometimes loss damage waiver (LDW).

Whether you have purchased insurance for the hire car from the car rental company in addition to the basic rental price or it was already included it in the basic price, you will probably find that it carries what is called excess. The excess is essentially a financial amount that you the hirer will have to pay towards the costs of any accidents and subsequent claim. In other words, if the policy carries an excess of 500 pounds sterling, then that is the amount you will have to pay if the car is say damaged to the tune of 1000 pounds. If the damage results in repair costs of 400 pounds, you will have to pay it all.

Some people are understandably concerned about the risks of excess, particularly so given that the excess on a policy may be anywhere between 500 and 1500 pounds sterling.

There are ways that the excess on a policy can be reduced or eliminated, and that through what is called car hire excess waiver. This is another form of insurance that forms part of what many people call car hire top-up insurance. This type of cover can be purchased from the car hire company in addition to their basic insurance and would mean that amongst other things, you could significantly reduce the amount of excess payable in the event of an accident.

This is though only one of several things that should be considered. It may be worth noting that other aspects of the basic car hire insurance from the car rental company are also limited. It lay be that the CDW policy excludes damage to several areas of the rented vehicle. In terms of third-party liability cover, although the maximum amount payable by law in the UK is unlimited, in other countries the policy may cap the maximum payout to an unrealistically low level far below the award levels a court may make following an accident. In such circumstances, the renter would need to pay the difference.

If you are looking for car hire excess waiver insurance, it may be worth thinking about buying rental car hire insurance not from the rental company but instead from a general insurance company or broker. You are not obliged to take the insurance offered by a car rental company and can use your own.

The car hire excess waiver insurance sold by direct insurers online is usually considerably cheaper than that of the rental companies and often offers additional benefits. As it is sold to a policyholder for a period (e.g. daily or annually) it covers all vehicles rented during the life of the policy not just one hire. The policies often cover areas of the vehicle typically excluded from cover by the basic CDW of the rental companies and they may also offer increases in third-party liability insurance levels where required. If saving money is of interest to you then it may be worth thinking about and researching!

If you hire a car then there is a fair chance you will have encountered the term ‘car hire excess’ and perhaps have wondered what that meant.

When you hire a car, it may come with some insurance included in the basic rental price or in some countries the insurance is added-on as an optional and chargeable extra.

Whichever in the case, you will probably find that parts of the insurance or perhaps the overall policy, contains something called excess. The excess is the amount of money, often called the ‘first part’ in insurance speak, that you as the renter will have to contribute towards any claim arising. The amount of excess varies between rental companies and countries but a figure of somewhere between 500-1500 pounds sterling would not be unusual.

The excess works quite simply. If the car rental company has a stated excess of say 500 pounds, then if you have an accident that causes damage to the rental vehicle of say 1000 pounds, you will be expected to pay 500 pounds of that 1000. If the total damage cost were 400 pounds, then you would have to pay the whole amount.

Car hire excess can be a cause for concern to many renters. There is of course the uncertainty coupled with the fact that if there is damage to the rented vehicle you will have little control over who repairs it and how. Costs can rapidly escalate even for small accidents.

It is also worth mentioning two other aspects of car insurance where some attention is usually required. Firstly it is worth checking carefully to make sure that the third party liability cover (essentially covering you against injury or damage you may cause to others with the rented vehicle) is adequate for your needs. Sometimes this is capped at a maximum payout level that is unrealistically low given the awards that courts can make following an accident. Secondly it may be worthwhile checking any exclusions contained within the rented vehicle damage insurance (often called CDW). You may find that many areas of the rented vehicle such as tyres, wheels, roofs and windows are in fact not covered.

You have two options if the car hire excess or other shortcomings in the car rental company’s insurance are of concern you.

You do have the option of taking out additional insurance through the car rental company. This can reduce or eliminate the excess, increase third party liability cover, and sometimes include in cover those areas of the vehicle normally excludes. These additional insurances may prove expensive though.

It is also possible to take out car hire excess insurance through a general insurance company or broker online. These policies offer all of the cover forms referred to above but they have the advantage usually of being considerably cheaper. As they are also sold to you the policyholder rather than just a single car rental agreement, they will cover most vehicles rented by you during the life of the policy. Do note, however, that as with all insurance policies, there will be terms and conditions, such as the provider’s set limit, which is typically 100,000 pounds, and the exception of some cars such as classic and sports cars and, motorhomes.

Many of the advertisements for car hire say things such as ‘insurance included’ but in reality the position with respect to the car rental insurance may need closer examination.

Car rental insurance is normally best considered from two points of view. What cover is included for damage done by you to third parties or their property (called third party liability insurance) and what cover is available for damage done to the rented vehicle itself (often called CDW or collision damage waiver).

It is difficult to generalise about the cover that may or may not be included in the basic rental price because the terms and offers will vary by each rental company and the country you are renting in. In most countries the vehicle will be rented with at least third party liability insurance. This is fine, but some caution may be required. That is due to the fact that the third-party cover available is unlimited by law in the UK but in other countries it may be capped at a maximum payout level that is unrealistically low given the high awards sometimes made by courts.

As the renter, you should be clear that if an award were made that exceeds the capped maximum of the third party liability policy, then you would be the one that has to pay the difference.

In some cases the rental company may include CDW to protect against some types of damage to the rented vehicle. This needs to be checked for exclusions such as the wheels, tyres, roofs and windows that are all typically excluded from cover although they are among the most commonly damaged areas of a vehicle. It is also worth examining carefully what’s called the excess. The excess is that amount of any claim that you as the renter will be expected to pay in the event of an accident and amounts of anywhere between 500-1500pounds sterling are not unusual.

If these ‘holes’ in car rental insurance cover are of concern, the good news is that purchasing the supplementary insurances (sometimes called ‘top-up’) can fill them.

It is possible to purchase these additional insurances from the car rental company, who will probably work hard to sell them to you. The additional insurance will allow you to reduce or eliminate the excess, increase your liability cover where appropriate and possibly include under cover those areas of the vehicle normally excluded from standard CDW.

This can be convenient, but it may also prove expensive. It is often possible to obtain equivalent or even superior cover, at a significantly lower cost, by purchasing car rental insurance online from a specialist insurance company or broker. These policies operate differently to those of the car rental company because they are sold to you as a policyholder and not necessarily just for a given car hire. They will cover all and any cars rented by your during the life of the policy (typically a number of days or a year). Should you have an accident and need to pay the car rental company the excess or for damage to an area of the vehicle excluded from the basic cover, these amounts can be re-claimed from the insurance company. It may prove to be a better and cheaper way of getting this type of insurance.