Archive for April, 2009
A car rented from an established rental company may come with some forms of basic insurance included in the rental price. Even if it does not, the rental company will offer insurance to you and they may also offer some forms of additional or ‘top-up’ insurance. One form of insurance you may see mentioned and that they may offer is car hire excess waiver.
This insurance relates to an aspect of car rental insurance called the ‘excess’. The excess is a financial amount that the car rental company will expect the renter to pay towards the costs of any claims even when insurance is in place.
It works on the basis that the ‘first part’ of any claim following an accident will be charged back to the renter’s credit card by the car rental company, with the amount being as defined the excess clause of their insurance policy and hire agreement. In other words, if the car insurance carries with it a stated excess of 1000 pounds (and the excess is typically set at somewhere between 500 and 1500 pounds) then this is the potential amount the renter may have to pay if they have an accident.
If the accident claim is say 1500 pounds and the policy has excess of 1000 pounds, the renter will pay the first 1000 pounds of the total 1500 pounds claim. If the total damage claim is only 750 pounds, the renter will in those circumstances need to pay the total claim amount of 750 pounds.
The risks of needing to pay excess can make some renters unhappy and uncomfortable driving the rented car. For these reasons, many seek additional insurance that will allow them to reduce or eliminate altogether the excess.
Most car rental companies will offer what they may call car hire excess waiver insurance. What this means is that for an additional cost, the renter will be able to reduce or remove (i.e. waive) the excess on the policy. The costs here can be high and usually are much higher than seeking similar cover elsewhere.
The other option is to research the policies and products of the direct insurance companies. Many such companies sell policies through the Internet that offer additional protection against several of the shortcomings that may be found in the basic car rental insurance. One such type of cover would be their version of car hire excess waiver and it is likely to be significantly cheaper that the rental company’s offering.
These directly purchased policies offer other advantages. As they can be purchased for a daily or annual basis, they cover the policyholder for the duration of the policy and not just a single rental. This means that any vehicle rented by the policyholder will be covered providing it is within the life of the policy and is covered by the terms and conditions (e.g. these policies may not cover specialist vehicle types such as sports cars).
If you are uneasy about the excess on the car rental company’s policy and are looking for car hire excess waiver, this option could offer you increased flexibility and at a much lower price.
When you are examining your car hire insurance, you will probably see that it is stated as being subject to ‘car hire excess’ or just ’excess’. It is important to understand what this means.
When renting a car in most countries, you may be reassured to see that the rental price includes insurance. This insurance will usually cover third partly liability, theft and collision damage waiver (or CDW as it is known). Together these insurances will offer cover against injury or damage you cause to another party or the property of another party, the risk of theft of the car, while CDW covers against the risk of damage to it.
In some countries, most notably the USA, the basic rental price may include none of these insurance products and you would need to purchase them all as optional extras.
The basic ‘in the price’ insurance provided by many car rental companies will usually carry what’s called excess. The car hire excess is a financial amount that the rental company will expect you to pay as the ‘first part’ of any insurance claim. In most cases the car rental company will set the car hire excess at an amount between 500 and 1500 pounds.
This works on a simple basis. If the rental company state the excess to be 1000 pounds, then if you have an accident and the claim total is 1500 pounds you will have to pay the first 1000 pounds of this amount. If the claim is 900 pounds, you will have to pay all of it.
In such unfortunate circumstances, the care rental company will usually charge the excess amount directly to your credit card.
Many renters feel uneasy about driving a rented car that has a large car hire excess on the insurance policy. The good news is that taking out additional insurance called ‘top up’ or perhaps ‘car hire excess insurance’ can reduce this risk. There are two ways of doing this.
Firstly, you will probably find that the car rental company will be keen to sell you additional insurance that may reduce the excess amount or possibly remove it entirely. Although perhaps useful, this insurance is usually expensive and significantly more so than the alternative option.
The second option is to purchase car hire excess insurance and related insurance cover from a direct insurance company online. They offer a variety of products aimed at the car rental market and in this particular case, they will offer policies that protect you against the excess payments charged by the car rental companies. Following an accident, if the car rental company charge excess to your credit card, you would be able to claim this back from your insurance policy.
Car hire excess insurance policies purchased from a direct insurance company are not only cheaper but also frequently more flexible. You can purchase them on a daily or annual basis and they cover you the policyholder rather than a specific car rental. This means that you can use them to cover you for any vehicle rented during the lifetime of the policy, with the exception of certain vehicle types such as sports cars or those of over a certain amount. This could be very convenient and flexible – particularly if you are renting regularly.
If you’re renting a car, you’ll also be faced with a number of options relating to car rental insurance cover.
In many countries, particularly those in continental Europe and the UK, you will probably find that some elements of car insurance are included in the rental cost. The nature of these may vary between rental companies and countries but it is not unusual to see a basic form of third party liability, theft and collision damage waiver (usually abbreviated to CDW) included in the car rental insurance cover that comes ‘in the price’ with the vehicle.
This means that you will have some cover against any injuries or damage you cause to someone else with the rented car. You will also have some cover against theft of the vehicle while in your care and CDW provides insurance against damage to the car you’re renting.
In a few countries such as the USA, the basic rental price may in fact include virtually no insurance. All car rental insurance cover in such situations will need to be purchased by you separately.
If you do not have these types of insurance in place, or you incur damage or costs not covered by them, you will be expected to pay directly. So, it may be advisable to ensure that these types of insurance are in place and adequate for your needs. Things to check may include
- Does the third party liability cover offer sufficient monetary protection to cover your costs given the large awards a court may make to someone injured by you when driving?
- Does the CDW portion cover all areas of the rented car or does it exclude (as the basic car rental insurance often does) damage to areas such as the wheels, tyres, roof, undercarriage and windows? If it does exclude these areas and they are damaged – you will need to pay.
- Does the policy carry excess? The excess is a financial amount that you will be expected to contribute towards the costs of any claim and it is typically set between 500 and 1500 pounds.
If you are unhappy with any elements of your basic cover as outlined above, you do have the option of increasing or ‘topping-up’ your insurance to cover excluded areas of the vehicle or reducing the excess payable etc. This ‘top up’ insurance can be purchased from the car hire company but you may find this to be an expensive option.
The direct insurance companies that sell various forms of car rental insurance cover online provide an alternative and usually much cheaper option. These companies can provide insurance that will reimburse you for any excess paid to the car rental company; cover areas of the vehicle excluded from the hire company’s insurance and increase the amount of third party liability cover available.
Car rental insurance cover purchased from direct insurers also offers another major advantage. As it is sold to you as a policyholder (the cover can be purchased on a daily or annual basis) it will cover any vehicle rented by you during the life of the policy – subject to terms and conditions etc. If you’re looking to save money and improve your insurance cover, it is an option that may be worth checking out.
We all know that we need car hire insurance but sometimes the terminology used to describe the various types of cover can be a bit confusing.
Collision Damage Waiver, Loss Damage Waiver, Supplemental Liability Insurance, damage waiver, liability waiver, excess, are all terms that slip easily off the tongue of the rental agent but what does it all do, how much do we actually need and do we have to buy it from the car hire company?
So to start with ‘what does it do?’ There are two main categories of car hire insurance.
The first provides cover for damage to, or the loss/theft of the hire car. This is commonly known as Collision or Loss Damage Waiver, CDW or LDW.
The second covers damage to someone else or to their car or property. This is known as Third Party Insurance and in the UK by law it is unlimited. This means that in the event of a court claim against you by a third party, all damages will be covered by the policy. If you are hiring a car in another country and particularly in the USA, any cover provided may not be unlimited but can be increased by purchasing Supplemental Liability Insurance or SLI.
How much do we need? This depends on the level of risk you are willing to accept to save money but it may be worth remembering that a few pounds saved on insurance may lead to significant expenditure costs in the event of a claim. This is because even if you buy CDW insurance there may be excesses and exclusions on the policy.
If your policy comes with excess then this excess is the maximum amount that you will be liable to pay in the event of damage to the car. Your policy will only cover amounts over and above the excess level. These excesses can be as much as 1500 pounds.
It is normal practice for car hire companies to exclude certain items from their policies. These items are typically the windscreen and other windows, the undercarriage, roof and tyres – all areas of the car most easily damaged. So if these excluded areas are damaged then you will be liable to pay for the repair.
You can take out additional car hire insurance to remove or substantially reduce the excess levels but this can be expensive if purchased from the car hire company.
This brings us to the final question, ‘do we have to buy insurance from the car hire company?’
The answer to this is no. There are insurance companies specialising in car hire insurance cover. They can provide insurance either on a daily basis for the duration of the rental or on an annual basis which means that if you rent another car later on, you can use the same policy. You can either take out all of your car hire insurance with the specialist or top-up the cover provided by the car hire company.
If your car hire agreement comes with some insurance included you may find that this is very limited in the amount of cover that it actually provides. So you can however use a specialist company to increase the level of cover.
The specialist company may have a limit on the value or type of car that they can cover. They may exclude vintage or sports cars for example or very expensive ones.
Most people though may find that the specialist company can provide car hire insurance at a significantly lower cost than similar cover sourced from the car hire company.
Nobody wants to pay over the odds for car rental hire insurance. But neither do they want to pay too little and leave themselves liable for costs in the event of damage to the rental car or to someone else.
Making sense of the confusing array of terms commonly used to describe car rental insurance can be a little daunting. The basic principals though are relatively straightforward.
Third Party Cover covers you for injury to someone else or to his or her property. In the UK this cover is unlimited which means that in the event of a court case, which results in damages against you, there is no upper limit on the amount that your third party cover will pay out. If you’re renting a car elsewhere in the world and particularly in the USA, you may find that third party cover is optional and is almost certain to be limited. In these circumstances it may be advisable to take out Third party top-up insurance also known as Supplemental Liability Insurance.
To provide insurance cover for the rental car itself you need a Collision Damage Waiver policy. Without a policy of this nature you would be personally responsible for the repair or replacement of a damaged or stolen vehicle.
One thing you need to be aware of is that your CDW policy may not cover you completely. Nearly every type of insurance comes with excesses and exclusions and car rental hire insurance is no different.
The excess is the amount of any claim that you agree to pay yourself. Excesses can be anywhere between 500 to 1500 pounds. If your rental car is damaged and is going to cost 1600 pounds to repair, then if the excess is 1500 pounds, that is the amount that you will have contribute to the repair costs.
Car rental companies will offer to sell you top-up or excess insurance to reduce or completely remove your liability to pay any excess charges. This can be very expensive and can add significantly to your car hire costs. It is worth bearing in mind that your excess insurance may still not cover you for damage to those areas of the car like the windscreen and the tyres specifically excluded from cover in the CDW policy.
One way to get the best possible insurance cover is to shop around and compare what other independent insurance companies are offering. Even if you have bought your main car insurance from the car rental company it is still perfectly feasible to shop around for your top-up or excess insurance. Provided you have no plans to hire a high value car or a sports or vintage model, then you may be pleasantly surprised at how much money you could save in addition to getting a superior level of cover – even for those areas of the car normally excluded from other policies.
Car rental hire insurance policies like this can be bought on an annual basis and so can be used again and again in the course of the year (subject to the above mentioned terms) making them very cost effective indeed.
You’re taking a very big risk indeed If you drive a rented car without car hire cover insurance.
In most countries of the world, driving a motor vehicle on a public road without certain minimums of insurance is a criminal offence. Not only that, but if you have an accident in a hire car and you are not insured, then you’ll have to pay for all the costs involved.
In fact, in most countries of the world the rented car will come with some forms of basic insurance already included in the price. In others, with the USA being the best example, the basic rental cost may include little if any insurance – all of which is available as an optional extra.
Wherever you are renting, and whatever rental company you are using, you should keep in mind that to reduce your risk of financial catastrophe it is necessary to consider three basic types of rental car insurance.
The first of these is third party or third party liability insurance. This is a form of car hire cover that will meet the costs of any third parties that have been injured or who have had their property damaged, by you in an accident. Although not a problem in the UK where the amount of cover must be unlimited by law, in most other countries you should check to ensure that the maximum amount payable is not capped by the rental company at an unrealistically low level.
The second form of car hire cover comes with theft insurance. This means you will be covered should the rental car be stolen while you’re renting it.
Finally, there is collision damage waiver (or CDW). This is a form of car hire cover that protects the rented vehicle, and your pocket, from damage caused during an accident. Once again, it is usually advisable to check this carefully as it will very probably exclude damage to certain areas of the rented car and in addition carry excess. The excess is that amount of money you will need to pay as ‘the first part’ of the cost of any claim. This excess is usually set at between 500 and 1500 pounds – a lot of money you may have to pay out given you have insurance.
Once you have reviewed the insurance position, you may feel that you would like to protect yourself further by increasing the level of liability cover, removing the exclusions relating to specific areas of the vehicle, reducing the excess payable or perhaps all three
You can do this in one of two ways. The car rental company will offer you additional car hire cover insurance. They may call this ‘top-up’ insurance and it may reduce the excess payable, increase liability cover and possibly cover normally excluded areas of the vehicle.
You may find though that this is expensive – typically much more so than purchasing the same insurance from a direct insurance company online. The specialist insurers will sell insurance that can cover all these risks for you and their prices are usually significantly cheaper than those of the rental companies.
Another major advantage of car hire cover insurance taken out through a direct insurance company is that it can be purchased on a daily or annual basis rather than being linked to a specific car rental. This means that for the lifetime of the policy, the renter will be covered for any vehicle rented (though this may exclude certain specialist vehicles such as sports cars or those with a value in excess of 100,000 pounds). So not only could this option save money but it may also be far more flexible. It may be worth investigating further.
Having a bump in a rental car can happen to anyone. In such circumstances what some renters then find is that their credit card has been billed a large amount by the car rental company for repairs. If you’d like to avoid this situation happening to you, it may be advisable to consider something called collision damage waiver cover.
This is a form of insurance that applies to rented cars and basically protects you against the costs of repairs to the rented vehicle if it is damaged while in your care. It may come included in the rental price or it may be an optional extra that the car rental company will advise you to purchase. It is important to remember that if you decline the collision damage waiver cover (sometimes called CDW) then you will personally have to pay for all repairs to the vehicle following an accident.
There are two other things that you should take note of in this area. Firstly, the basic Collision damage waiver cover sold (or provided in the price) by the car rental company is very likely to be limited in terms of what it covers. It will typically exclude damage to areas of the car such as the wheels, tyres, roof, undercarriage and windows. These areas of a vehicle can be easily damaged even in trivial accidents and they can be expensive to repair. If they are excluded, you’ll have to pay.
Secondly, the policy will probably carry excess. The excess is an amount of money that the car rental company will expect you to pay towards the cost of any repair bills even if you have collision damage waiver cover in place. This figure is often between 500-1500 pounds. So if you have excess of 1000 pounds on the policy and the repair costs are 1500 pounds then you will need to pay 1000 pounds towards the costs. If the repair costs are 750 pounds you will have to pay it all.
You can avoid some of the risks here by purchasing additional insurance (sometimes called top-up) that can reduce the excess and extend cover to include areas of the vehicle normally excluded.
The car rental company may offer top-up insurance but in general their insurance will be significantly more expensive that the same policies purchased from a specialist insurance company online. These companies offer collision damage waiver cover that will reimburse your costs should you have to pay the car rental company excess or form damage to parts of the car excluded by the car rental company’s own basic policies.
Purchasing collision damage waiver cover from a direct insurer may not only save you money but it could offer significant additional flexibility. That arises from the fact that these companies sell their policies to a policyholder and they can be purchased on a daily or annual basis. What this means is that the policy will cover any vehicle rented by the policyholder during the life of the policy (subject to their conditions). This could save significant amounts of time cost and administration – particularly for those renting regularly.
When you rent a car, you probably want to believe that you are covered against the costs of any accidents arising. You may have paid the car rental company for insurance or been told it is included in the price, and hope that this is an end to the story. Sadly this may not be the case unless you have also purchased something called CDW Excess Insurance.
When you rent a car, it may come with something called Collision Damage Waiver or CDW for short. CDW is that component of the rental car insurance that covers damage to the hire car while it is in your care. Whether CDW was included in the basic rental price or purchased as an optional extra from the rental company, there is a fair chance that the rental company’s basic CDW will have one or two limitations that may be worthy of attention.
Firstly, it may not cover all areas of the rental vehicle. To the surprise of some renters, most basic CDW will exclude from cover, damage to areas of the vehicle such as the roof, wheels, tyres, undercarriage and windows. These can all be expensively and easily damaged even in minor accidents. If they are not covered by your CDW policy then you will need to pay.
Secondly, most basic CDW will also carry something called excess. The excess is a financial contribution that you the renter will need to make following an accident – even if you have CDW in place. The excess is usually between 500 and 1500 pounds and it works simply. If you have an accident and the cost of repair is 1000 pounds, if there is a 750 pounds excess on the policy then you’ll have to pay 750 pounds. If the cost of the damage is 600 pounds, then you’ll have to pay it all.
Many renters feel less than happy about these limitations and risks to their financial wellbeing. Fortunately there is an answer – CDW excess insurance.
The car rental company may well offer to sell you additional insurance sometimes called ‘top-up’. This insurance may mean that you can effectively reduce or perhaps eliminate the excess and perhaps cover some areas of the rented vehicle that are usually excluded.
This type of insurance purchased from a car rental company is usually expensive. A perhaps more economic options is offered by the direct insurance companies that offer CDW excess insurance online. These companies offer policies that work on the basis of reimbursing you for any excess charges you may have to pay the car rental company following an accident. Typically these policies will also cover you for any repair costs you have to pay the rental company for damage to those often excluded areas of the vehicle such as the wheels etc.
One of the other major advantages offered by a direct insurance company selling CDW excess insurance is that they sell their policies to you the policyholder. The policies can be purchased by either the day or on an annual basis. As such they will cover any vehicle rented by you during the life of the policy – with the exception of some specialist vehicle types such as sports cars or motor homes or those that are very high in value (usually over 100,000pounds). This flexibility can save you both time and money. It may be an option worth exploring.
Loss damage waiver is an insurance term used to describe a type of cover that relates to rental cars. In some companies and countries it may be called collision damage waiver or CDW for short.
If you’re renting a car, the insurance position will vary considerably depending upon the country you are renting in and the car hire company you are planning to use. In some cases, as in he USA, you may find that the rental car price includes virtually no insurance cover and all forms of insurance need to be purchased as ‘optional extras’. In other countries the rented car may come with combinations of insurance included in the basic price.
It is the renter’s responsibility to check what the insurance position is and whether the insurance they have is adequate or not for their needs. To do this though one needs to understand the three basic forms of rental car insurance.
a) Third Party or Third Party liability.
This type of insurance will offer you cover against damage that you may do to a third party or their property. It is usually worth checking this carefully. That’s because although in the UK the amount of cover in this category is unlimited by law, in other countries it may be limited to an unrealistically low level given the size of the awards a court could make following an accident.
b) Theft cover.
As the name suggests, this would cover you should the rental car be stolen whilst in your charge.
c) Loss damage waiver (LDW or CDW)
This form of insurance protects you against the costs of any damage to the rental car while you’re responsible for it. Once again, you may need to check this carefully because the basic forms of loss damage waiver from the car rental companies may be limited. You may find that several areas of the vehicle are excluded (e.g. the wheels) and this could be very expensive for you following a minor accident.
Finally, the car rental company’s insurance is very likely to carry significant excess. The excess is a financial amount that you’d be expected to pay towards the cost of any claim and it is typically in the range 500-1500 pounds.
If you’re uncomfortable with any aspects of your basic car rental insurance, you will have the option of purchasing additional insurance that will do things such as increase the amount of personal liability cover available, cover areas of the car normally excluded by standard loss damage waiver and reduce or eliminate the excess.
You can purchase these additional insurances from the car rental company but this is often a very expensive option. A more economic route is usually that offered by the direct insurance companies who offer car rental insurance online – usually much cheaper than the rental companies. So whether you’re looking for additional loss damage waiver or third party liability insurance, it may be worth while checking out the direct insurers rather than just taking the rental company’s insurance by default. It could save you some serious amounts of money.