Protect Your Excess

When you drive a rented car, you are at risk. Accidents can happen to anyone so having insurance is usually a sound idea. It’s therefore important to ensure that you understand your car hire cover insurance and are confident that it meets your needs.

If you’re renting a car, you may need to think about three categories of ‘risk’. The first is “who signs the big cheque if I injure someone with the car or damage their property?” The second is “who will pay if this car gets stolen?” and then finally “who has to pay if this rented car gets damaged?”

The answer to all three questions is simple if you do not have insurance to cover these risks – you will!

Most car rental companies in most countries will include some components of basic insurance in their rental price, although this is not always the case. In some countries, notably the USA, a more common approach is for renters to buy individual components of insurance separately.

If the insurance is included in the rental price or sold by the car rental separately, it should normally be seen as covering the above three risks. Protecting yourself against claims from third parties is called third party liability insurance. Theft will be called theft insurance and damage will normally be called CDW (Collision Damage Waiver) insurance.

It is important then to understand whether these types of insurance on your rental car actually provide the cover you need. Although in the UK third party insurance cover must by law be unlimited, in some other locations it may be set to a maximum payout level that is unrealistically low given the size of some court awards. The CDW may also exclude damage sustained to several areas of the vehicle amongst the most easily damaged in an accident including the wheels, tyres, undercarriage, windows and roof.

Finally, you will need to consider the excess. The ‘excess’ is a financial amount that the car rental company will stipulate that you’ll need to contribute towards to the cost of a claim as the ‘first part’. This amount is usually between 500 and 1500 pounds.

If you’ve reviewed your insurance and decided that you still feel too exposed by these gaps and limitations, you can purchase ‘top-up’ car hire cover insurance from the rental company. This may reduce the excess and increase CDW cover to other areas of the vehicle – but you should be aware that this insurance is usually considerably more expensive than car hire cover purchased from other sources.

It may be worthwhile checking out the direct insurance companies that sell car hire cover over the Internet. These policies are not only significantly cheaper than the rental companies’ insurance but they offer increased flexibility.

As an example, if you purchase car hire cover from a direct insurance company it would allow you to claim back any excess payments or damage costs to areas of the vehicle excluded by the rental company’s policy. It is also possible to purchase from them additional third party cover, usually called SLI for supplemental liability insurance. These policies are sold to you as a policyholder and for a period of time. During the life of the policy it would cover you for any vehicle rented, subject to certain conditions. Altogether, this may prove a very attractive package. It may be worth investigating further.

Nobody enjoys the form filling and debates that arise at the car rental desk when collecting that rented car. It doesn’t seem to matter how much information you’ve provided beforehand, there are always issues on insurance and explanations why you need more. There is a way to avoid this – it’s called annual car hire insurance.

The reason this area can become a subject discussion when attempting to collect the hire car is that the car rental company will understand that their basic insurance included ‘in the price’ is limited. They will be checking to make sure that you also understand this fact, and probably will try to sell you additional insurance to plug these ‘gaps’ in the basic cover.

These ‘gaps’ arise because of the nature of the basic car insurance offered by the car rental companies. Whether their insurance is included in the rental price or purchased from them separately as optional extras as is the case in some countries, it is likely to contain a number of exclusions and limitations.

Third party liability insurance is there to cover claims against you from third parties that you have injured them or damaged their property with the rented car. Although in the UK by law the cover here must be unlimited, in many other countries the rental company may stipulate a ‘maximum payable’ sum that is too low when considered in terms of very high court awards often made after an accident.

The car hire insurance should also provide what’s called CDW (collision damage waiver) cover. This will cover you for any damage that may happen to the car while you’re in charge of it. Unfortunately the car rental policy will probably exclude damage caused to several areas of the vehicle including tyres, wheels, roof, undercarriage and windows – all areas very easily damaged even in trivial accidents.

Finally, the car rental company’s policy will almost certainly carry ‘excess’. That is the amount of financial contribution you’ll be expected to contribute towards the cost of any claims. This amount is often set between 500 and 1500 pounds.

When you arrive at the rental desk, the car hire company will be looking to ensure you understand these limitations and probably offering you ‘top-up’ insurance that will reduce the excess or cover additional areas of the vehicle etc. Although this may sound a good idea, in reality the car rental insurance sold by car rental companies is much more expensive than similar or better products purchased elsewhere.

That’s where annual car hire insurance comes in. There are direct insurance companies operating over the Internet that offer a range of car hire insurance products that are invariably very much cheaper than the rental companies. These policies will, for example, reimburse you should you need to pay the car rental company excess or for damage to ‘excluded’ areas of the vehicle.

One of the major advantages of the direct insurers’ policies is that they can be purchased for annual cover. If you are planning to hire cars regularly during a period then an annual car hire insurance policy from a direct insurer could save you a lot of money and avoid the necessity of needing to have the same debate every time at the collection desk!

If you know that you are likely to rent a car a number of times in the coming year, then it may be worthwhile considering buying annual car hire excess insurance cover.

Even if you have purchased damage insurance from the car hire company, it may not provide the cover you expect. You may find that you are still liable to pay fairly high levels of costs should the hire car be damaged.

This is because the standard CDW (collision damage waiver – the damage protection insurance available for hire cars) cover offered by car hire companies often comes with excesses that can be substantial. The excess is the part of any costs of damage to the vehicle that have to be paid for by you, the renter, before any claim is made on the policy itself. So for example, if there is damage to the vehicle costing 800 pounds and the excess is 750 then you would have to pay 750 pounds of the repair bill. If the damage were valued at 600 pounds, you would have to pay all 600. Excesses can range from 500 pounds to as much as 1500.

In addition to excess charges, many CDW policies may also exclude damage to certain parts of the car from their cover. This means that any damage to these areas of the car, typically the windscreen, tyres, roof and undercarriage, must be paid for by you.

In these circumstances, it is unsurprising that many people feel that it is a sensible step to try to remove or at least reduce the excess amounts they would be liable for by taking out excess insurance, which can also be known as Super CDW. However even if you buy car hire excess insurance from the car hire company that has significantly reduced any excess payable, you may also find that damage to the windscreen, tyres etc is still excluded from the policy.

An alternative to the daily excess insurance on offer from the car hire company is an annual insurance policy supplied by an independent specialist insurance company.

Annual car hire excess insurance cover differs from that supplied by the car hire company in that, as the name suggests, it is an annual policy which ‘belongs’ to you the policyholder and is not tied in to a specific car rental. It can therefore be used for any number of car rentals within the yearly duration of the policy provided that the car being rented meets the agreed criteria. Very high value cars, vintage cars and sports cars are likely to be excluded from this type of cover and the full details will be contained within the terms and conditions.

Annual excess insurance policies are readily available for your car hire needs in the UK, USA, Europe and elsewhere. The car rental company will charge any costs to your credit card and all you have to do then is to claim on your annual car hire excess insurance policy for reimbursement.

Even if you do not intend to rent a car on more than one occasion during the year, you may find that you could still save a lot of money with an annual car hire excess insurance policy. Knowing that your policy covers all parts of the car can bring much valued peace of mind.

Rental car excess insurance is something that is designed to help protect you from unexpected shocks and even worse, unforeseen hefty charges to your credit card.

This is not just a theoretical possibility – it can and does happen. Read on to understand how…….

When you hire a car, normally car insurance will be fairly high on your list of priorities. You’ll most likely have checked what insurance is or is not included in your basic rental price and probably made sure that you are covered for third party liability, theft and collision damage waiver (CDW) to cover you against damage to the rental car.

Whether these things were included in the basic rental price or, as in some countries such as the USA, purchased separately, you may think that once they’re all in place that you’re covered against all eventualities.

Sadly, that’s not usually the case. Most of the basic car insurance purchased from the car rental company will come with certain limitations and exclusions that could leave you financially exposed. One of these is something called excess.

The ‘excess’ is an insurance term that is used to describe what is, in effect, a mandatory contribution the car rental company will expect you to make towards the costs of any claims. The amount it is set at will vary by company and country but it is usually between 500 and 1500 pounds. It works on the basis that it is the ‘first part’ of any claim made. In other words, if the excess is set at 750 pounds and you have a claim that totals 1000 pounds, you will have to pay 750 pounds of it. If the claims totals 600 pounds – you’ll have to pay it all.

This is where in the past some renters have received a shock. Although they have car insurance in place, following a trivial accident they have subsequently seen a hefty amount (the excess) charged to their credit card for repairs etc.

To avoid this, it is possible to take out rental car excess insurance. The car rental company sometimes sells this where it may be offered to the renter as one of several forms of ‘top-up’ insurance aimed at bridging gaps in the cover provided by the rental company’s basic insurance policy. This insurance could reduce or eliminate the excess on the policy but it is likely to prove expensive.

The specialist online insurance companies will offer a much cheaper option. They sell a number of hire car insurance policies aimed at improving the cover available to someone renting. One of these will be rental car excess insurance. This will operate on the basis that if you receive a charge to your credit card for excess following an accident, you will be able to claim this back from your insurance company.

These direct insurers sell their policies differently to the car rental companies. The direct policies are sold to you as the policyholder and not a specific car rental. They can be taken out on a daily or annual basis and as such, they have an active life period. This means that any car rented by you during that period will be covered – providing certain specialist types of vehicle are avoided such as sports cars or those over 100,000 dollars in value.

Rental car excess insurance purchased from a direct insurance company can therefore not only saves you money but also very possibly add flexibility, particularly to those renting regularly.

When renting a car, most people will take the time to scan through what the various car rental companies are offering to ensure that they get the best possible value for money. It seem a little strange therefore that many people will automatically accept insurance for car rental from these companies without even considering if they could have got a better deal elsewhere.

In fact it could be argued that many people don’t even realise that they have the option to shop around and go elsewhere for a good deal on insurance for car rental.

Even if your car rental comes with some insurance included in the price it is unlikely that this will provide an adequate level of cover. Of course, following an accident if you are willing to pay large excesses (the amount of financial contribution you’ll be expected to make – usually between 500 and 1500 pounds) and fork out for damage to windscreens, wheels, tyres and roofs (these are frequently excluded from many car rental company policies) then it’s possible you may find the car rental company’s policies to be perfectly adequate!

It is possible to pay extra to include those ‘exclusions’ or to reduce the excesses payable but this form of insurance can be extremely expensive if bought from the car rental company.

There are insurance companies who specialise in insurance for car rental and who can provide all of your insurance or just top-up cover for excesses at much more competitive prices than those typically found at the car rental desk. These policy types work on the basis that if you have to pay the rental company excess after an accident, you will be able to claim this amount back from your direct insurance policy. The direct insurers in the same fashion will also cover those areas of the rented vehicle that are commonly excluded from the car rental company’s insurance for car rental.

One type of cover that these companies can offer is an annual policy, which covers you the policyholder and not the rental agreement. What this means is that you can use this policy again and again in the course of the year for all your car rentals. It is subject to terms and conditions that generally state (e.g.) that the renter would not be covered for specialist vehicle types such as sports or vintage or those over a certain value.

The independent companies also offer daily rates as well. They also sell other forms of top-up insurance that provide additional covers in area such as third party liability.

If you are being careful about what car rental company to use and looking for the best deal possible, it may be a good idea to apply the same disciplines and techniques in your search for the best option on insurance for car rental. You could save yourself a lot of money; get a more flexible policy and better cover. It may be a good idea to get those fingers tapping and that Internet searching underway!

The basic forms of car insurance supplied by a car rental company will most likely still expose you to significant costs in the event of an accident, unless you have in place something called excess waiver insurance.

To understand what excess waiver insurance is and how it could protect you, it’s necessary to explain the basics of insurance for rental cars.

When you hire a car, it may come with some forms of basic insurance included in the price. These insurances may cover third party liability (i.e. the injury or damage you may cause to someone else or their property), theft of the rented vehicle and something called collision damage waiver (CDW) that will cover some of the repair costs should the rented be damaged.

Even if the rental price does not include some or all of these types of insurance, as is often the case in the USA, the car rental company will usually offer to sell these types of cover at additional cost.

Whatever the position, it is usually the case that the basic insurance supplied or sold by the rental company will be limited in one or more important respects. One of these is something called the policy’s excess. The excess is an amount of money that the car rental company will expect you to pay towards the cost of any claim. It operates on the basis that the car rental agreement will specify the excess amount (typically between 500 and 1500 pounds).

Should you subsequently be unfortunate enough to have an accident and the repair costs total 1500 pounds, if there is excess on the policy of 1000 pounds then you’ll have to pay that 1000 pounds as the ‘first part’ of the claim. The rental company will charge it directly to your credit card. If the damage totalled 750 pounds then that total amount will be debited to your card.

Many renters express some shock at the amount of financial exposure and risk involved given they thought they had paid for insurance. There are options available to reduce these risks and one of those is excess waiver insurance.

The car rental company will usually offer for sale various forms of ‘top-up’ insurance that are designed to bridge some of the gaps in their basic cover. One of these will probably be called excess waiver insurance and this essentially means that for an additional cost you will be able to reduce or perhaps eliminate entirely the stated excess on the basic policy.

Excess waiver insurance purchased from a car rental company is likely to be expensive compared to the same insurance available online through the specialist insurance companies. The direct insurers offer policies designed to offer protection for people renting hire cars and this includes covering the excess. They work on the basis that if you have an accident and need to pay excess to the rental company, then your insurance company will reimburse you. This is usually a significantly cheaper route than the insurance offered by the car rental companies.

The direct insurance companies policies also offer other benefits. One of these is that they can be purchased on a daily or annual basis. The advantage here is that as a policyholder owns the policy for the stated period, any vehicle rented by them during that period will also be covered although this will normally not include specialist vehicles such as sports cars or those over a certain value.

If you’re thinking of excess waiver insurance to protect your interests, it may be worthwhile checking out these direct insurers through the net.

Renting a car has never been easier and there are many good deals to be had. How do we know though if the rental car insurance coverage that comes as standard with many mainstream car rentals, is actually good value for money?

For many of us purchasing our entire rental insurance from the car rental company may seem to be the easiest and most logical thing to do. Surely if the rental price was a really good deal then the insurance must be too. Sadly this is not necessarily the case and it is generally accepted that the insurance provided by car rental companies is expensive. It may also still leave the renter with significant costs in the event of an accident or damage to the vehicle

This is because the insurance cover provided by the rental company may carry exclusions and hefty excesses.

The exclusions applied to rental car insurance coverage are for the areas of the car that may be some of those most easily damaged. What this means is that any damage to the windows including the windscreen, the tyres, the roof and the undercarriage may not be covered by the standard insurance policy.

Similarly with excesses, you may find that you will still be liable to pay for the first, or excess, part of the costs to repair any damage to the vehicle. With costs of 600 pounds for example and an excess of 500, you will have to pay 500 and the insurance will cover only 100.

It is possible to buy additional top-up insurance from the car rental company to include ‘exclusions’ or to reduce or remove excess completely but this can be a very expensive option.

An alternative is to consider using an independent insurance company for your rental car insurance coverage, or at least for your top up cover. You may find that the rates offered by these companies will be significantly cheaper than those offered by the car rental company.

A specialist insurance company will be able to offer policies either on a daily or an annual basis. An annual policy is obviously valid for a year and can therefore be used by the policyholder for any number of rentals in that year, subject to the policy’s terms and conditions. You may find that even if you use your annual policy only once it could still be cheaper than buying the equivalent insurance from the car rental company.

How it works is that in the event of an accident, the car rental company would charge the cost of any damage to your credit card and you would then make a claim on your car rental insurance coverage for reimbursement.

Direct insurers offering car rental insurance typically will not cover unusual or specialist vehicles such as classic or sports cars. There will also usually be a limit as to how much you can claim back on a high value vehicle.

If you’re looking for a normal rental vehicle to get from A to B, you may find that you can make substantial savings on rental car insurance coverage by shopping around for a good deal from an independent insurance specialist.

If you’re looking for insurance for rental cars, you will probably find that you are facing one of three situations – depending upon the country you’re renting in and the rental company you’re using.

The first is that in some countries such as the USA, the rental price may include little or no insurance. You will need to purchase it all separately and the car hire will offer their own insurance products as optional extras.

The second situation covers Europe and many countries around the world, in all probability the rental company will include some forms of basic insurance in the rental price.

Insurance for rental cars usually covers third party liability, theft and CDW (collision damage waiver – this covers you for damage caused to the rental vehicle). In countries where insurance is included in the rental price, this almost invariably includes third party liability and theft and MAY include CDW although CDW can also be excluded from the basic rental cost and available as an optional extra.

The third situation covers the nature of the insurance. Whether it comes included in the price or the rental company are selling it separately, the key thing to ascertain is whether or not it provides the cover you need and require.

That’s necessary because the basic level car insurance offered by the car rental companies usually contains potentially significant exclusions and limitations. Third party liability cover must by law be unlimited in the UK, but in other countries the payout level may be capped at an unrealistically low level given the awards courts can make following an accident. The basic form of CDW insurance will usually exclude damage to certain areas of the rented vehicle such as its wheels, tyres, undercarriage, the windows and possibly roof.

The car rental company’s insurance probably will also carry what’s called ‘excess’. This term is used to describe an amount of money that the car rental company will expect you to pay as the ‘first part’ of any claim, and the excess is typically set between 500 and 1500 pounds. If you have an accident that results in a claim of say 1500 pounds and the policy has excess of 1000 pounds, then you’ll have to pay that 1000 pounds. If the damage is 750 pounds, you’ll need to pay it all.

All things considered, many renters feel uneasy about these financial exposures and look to protect themselves by purchasing additional insurance. If you feel the same way, you will find that you have two options.

It is usually possible to purchase additional ‘top-up’ insurance directly from the rental company. The disadvantage here is that this is typically considerably more expensive that similar insurance for rental cars purchased from a direct insurance company.

There are insurance companies online that specialise in insurance for rental cars and they are usually much cheaper than the rental companies. They have policies available that will increase the amount of third party liability cover, cover those areas of the rented vehicle normally excluded by the rental company and which will reimburse you if you need to pay the rental company excess. Their policies are sold on a daily or annual basis so any car rented during the life of the policy will be covered (subject to terms and conditions). These policies could offer not only significant cost savings but also increased flexibility. It may be an option worth investigating.

Insurance for hire cars is an important subject. If you are not familiar with it and are thinking of hiring a car, it would be advisable to take a few minutes to get to grips with the basic principles. You could save yourself a lot of grief and very probably a lot of money.

When you hire a car in Europe and most other countries of the world, you will probably find that some tyres of insurance are included in the rental price. What is or is not included will vary by country and the hire company concerned, so you’ll need to check carefully to see what you’re getting. It’s also worth noting at the outset that in some countries (notably the USA) there may be little or no insurance for hire cars included in the basic rental price – it all needs to be purchased separately.

Whether insurance is included in the hire price or purchased separately from the rental company, you’ll probably find that it breaks down into two major categories. One of these is called third party liability. This basically means that if a third party is injured, or their property damaged, by you while driving the rented car then you do have some insurance to meet those claims.

The key thing to check here is that the level of liability cover is sufficient to meet the sometimes very high awards made by courts following an accident. Although by law such insurance in the UK must be unlimited, in many other countries the hire company may cap it at an unrealistically low level.

The second category of insurance for hire cars is usually called CDW (collision damage waiver). This basically covers you against any damage arising to the rented car while in your care.

Your CDW cover may need to be checked for two things
• It should include cover for theft of the vehicle
• Are some areas of the vehicle excluded from cover – typically these may include the tyres, wheels, roof, windows and undercarriage and they can all prove expensive to repair if damaged.

It may also be prudent to check if the rental company’s insurance carries excess. The excess this is the amount of ‘contribution’ the car rental company will expect you to make towards the costs of any claims and typically it is set somewhere between 500 and 1500 pounds.

It is possible to purchase ‘top-up’ insurance to improve the cover available and remove some risks such as the excluded areas of the vehicle. This can be purchased from the rental company although you may find that their products are considerably more expensive that similar policies purchased directly online from specialist insurers.

The insurance for hire cars purchased directly from insurance companies will also usually offer more flexibility. They will cover excluded areas of the rental car and will reimburse you for any excess you may have to pay to the car rental company. They also offer products that significantly increase the levels of liability insurance cover. As these policies are sold directly to you as the policyholder on a daily or annual basis, they will also cover all vehicles rented during the period (subject to terms and conditions such as no sports vehicles etc). This could be very beneficial and particularly so for those renting on a regular basis.

The thought of having an accident while driving a rented car would worry most people. Even if nobody is injured, the costs of repairs to the rented vehicle will be payable by you, the renter, unless you have in place a form of insurance called damage liability waiver.

Damage liability waiver (this may also be called CDW for Collision Damage Waiver) is insurance that will pay for some types of damage to the rented vehicle. In some cases this form of insurance will be included in the basic rental cost of the vehicle or in others you may have to purchase it separately as an optional extra. This will vary by country and perhaps the rental company and you can check their rental agreements for details.

Although it is often tempting to save money by economising on insurance, it is worth keeping in mind that if you do not have this in place you will have to pay for all repair costs to the vehicle if it is damaged in an accident. This could run to several thousands of pounds.

Unfortunately, having damage liability waiver in place isn’t quite the end of the story if you’re trying to protect yourself from such risks. That’s because the basic damage liability waiver insurance provided by the car rental company, either in the price or purchased separately, will have limitations. It will very likely not cover damage to certain parts of the car such as the wheels, tyres, roof, undercarriage and windows. These are all areas typically damaged in minor accidents and they can be expensive to repair.

The policy will also probably carry excess. The excess is stated to be a financial amount that the car rental company will expect you to pay as the ‘first part’ of any claim. It is usually set at a figure between 500-1500 pounds. If it is stated to be 750 pounds and you have an accident that causes 1000 pounds of damage to the car, you will have to pay the 750 pounds excess. If the total cost is 400 pounds, you will have to pay it all.

If you are unhappy with these two limitations, you will probably have the option to purchase additional ‘top-up’ insurance from the rental company. This could reduce or eliminate the excess and possibly extend cover to excluded areas of the vehicle. It’s worth noting though that this type of insurance sold by the car rental companies is expensive – usually very much more so than similar insurance purchased directly online from an insurance company.

The direct insurance companies will sell damage liability waiver insurance that is not only cheaper but also more flexible. They are selling their policies to you as a policyholder and they can be taken out on a daily or annual basis. What this means is that the policy covers you not a given rental, so any car you hire during the life of the policy will be covered (there will be some exclusions for specialist vehicle types such as sports cars or very high value cars of over 100,000 pounds in value).

Purchasing damage liability waiver insurance from a direct insurance company could save you a lot of money and improve your level of protection – it may be worth thinking about!