Protect Your Excess

Excess waiver insurance is a type of insurance that applies to rental cars and it could save you money. How?

The excess on rental car insurance
For many people renting cars, the words on the car hire company’s site that say “insurance included” are a source of comfort. Yet this may not be the end of the story.

There are two common forms of rental car insurance:

• third party liability – this provides a financial shield against costs awarded against you following a claim from a third party relating to injury or property damage you may have caused them with the rented vehicle;
• CDW (collision damage waiver) that does the same thing but for any costs you may incur due to damage to (or the theft of) the rental car.

The policy may however carry what’s called an ‘excess’.

The excess is defined as an amount of money, typically between £500-£1600, that the rental company may debit to your credit card following an accident.

It works like this, using an example of an £800 excess. If you have an accident that leads to £1000 worth of damage, you may find £800 pounds of that charged to your credit card and the rental company’s insurance would pay the balance of only £200. Had the damage cost £750 you would have paid it all.

Excess waiver insurance
It would be understandable if you were a little concerned about this. Following an accident you may have little or no control over who assesses the damage to the hire car or who repairs it and for what cost.

You can protect yourself from the risks of an excess charge by taking out excess waiver insurance. This typically comes in two forms:

• purchased from the rental company (who may call it ‘top-up insurance’ or possibly ‘Super-CDW’);
• purchased from an online provider of specialist car rental insurance.

In the case of the former, the rental company’s excess waiver insurance means that they may agree to reduce or perhaps even remove entirely, the excess from their policy.

The specialist providers of excess waiver cover operate by offering you a policy that you can use to reclaim any excess charges you’ve been billed by the rental company. Typically these forms of policy will be cheaper than the cover offered by the car rental companies.
You may also find that the policies of the specialist providers bring added benefits.

Typically the basic CDW insurance provided by a rental company will exclude a number of important areas of the car from its base protection. These may vary but typically include the wheels, tyres, roof, windows and undercarriage. Any damage to those could also result in a charge to your credit card.

The policies sold by the specialist providers may also cover you against these charges. Not only that but they can be purchased on an annual basis. This means that if you rent regularly you could use the one policy for all your excess waiver insurance needs during the lifetime of the policy (subject to terms and conditions). So it could save you even more money!

Using an independent insurance provider for European car rental insurance may make good financial sense - particularly when you consider some of the additional features that are typically available from many of these suppliers.

When you rent a car for the UK and many European destinations, you may find that there will have been some elements of European car rental insurance included in the price. These are likely to be;

• third party insurance to cover injuries to other people or damage to their property, and;
• collision damage waiver to cover damage to the hire car itself.

Collision damage waiver (CDW) as supplied by the car hire companies (whether as part of an all-in-deal or bought separately) is likely to contain two major exceptions as far as cover is concerned.

The first is that CDW typically excludes certain parts of the car from cover. This means that if these parts were to be damaged, then they would not be insured and you would have to pay for their repair. The parts concerned are the windows including the windscreen, the tyres, the roof, wheels and the undercarriage.

The second point is that collision damage waiver will usually carry an excess. The excess represents the amount of money that you agree to contribute to any repair costs for damage to the vehicle even if they are insured. Excess charges can be as much as £1600 depending on the vehicle type and country which you they are hiring in.

You may feel that the risks of being responsible for this level of potential expenditure are unacceptable. In this situation, it may be prudent to buy some additional European car rental insurance to top-up the cover of the basic CDW and to reduce or remove the excess completely - and this is where using one of the independent specialists could make a difference.

These Internet based specialists have a number of European car rental insurance products to cover a variety of circumstances. Their products may offer special deals for families and the over 75s.

In addition they can also provide many of their policies on an annual basis. What this means for you is that rather than buying insurance each and every time you rent a car you may be able to use an annual policy. This could not only save you time but also possibly some money.

Policies of this type can cover most types of vehicle with certain exceptions, such as:

• high value cars in excess of $100,000;
• sports or vintage models;
• motor homes;
• commercial vehicle;
• motorbikes.

This is unlikely to be a problem for most renters.

So if you decide to buy some car rental insurance from one of these independents, all you have to do is to remember to arrange your cover before you rent the car.

Then if you do have an accident, although the car rental company may still charge any excess and other fees to your credit card, you would then simply claim on your European car rental insurance policy for reimbursement. Having this form of insurance may save you money!

Hiring a car may be either fun on holiday or something that’s essential for business. Whichever is the case, it may be important to understand a little about damage liability waiver if you are to be confident that you are well protected by appropriate insurance.

Basic car hire insurance

At the time you book your rental car, the hire price may include some components of insurance.

Depending upon the hire company you’re using and the country of rental, this may range from:

• little or no insurance in places such as the USA;
• third party cover only;
• third party cover and a basic form of damage liability waiver.

Damage liability waiver

This form of cover is sometimes called CDW for ‘Collision Damage Waiver’. It offers you protection against the costs of any damage done to the rental car while you have it on hire. It’s perhaps worth noting that this typically includes cover against theft.

If you do not have this form of insurance protection, you will be personally liable for all costs arising from damage to or theft of the hire car.

If your rental does not include it, you may be able to purchase it from the hire company or possibly at a more competitive rate from an on-line specialist provider of rental car insurance.

Exclusions and Limitations

The damage liability waiver provided by the car hire companies ‘in the price’ will typically come with two significant limitations:

• an excess of typically between £500 and £1500;
• several areas of the vehicle excluded from cover such as the tyres, wheels, roof, undercarriage and windows.

This means that following an accident, even if you have the rental company’s insurance, you may still end up facing some potentially large bills.

Options for additional protection

If you are worried about the extent of your financial exposure as a result of the above limitations, you do have options.

It may be possible to purchase additional insurance from the car hire company that will reduce or remove the excess and possibly also include cover for the typically excluded areas of the vehicle. The rental company may call this something like ‘top-up cover’ or perhaps ‘Super CDW’.

Once again, a cheaper alternative may be to purchase excess protection insurance from the specialist on-line providers of rental car cover. These policies work by reimbursing you for any excess costs that you may have been charged by the car rental company.

These policies also may provide an additional advantage. Not only can they sometimes be cheaper but you may be able to purchase them on an annual basis. This means they will cover any vehicle rented by your during the period – subject to some exclusions for special or exotic vehicle types.

The excess protection insurance offered by the on-line providers of car rental insurance may offer you additional peace of mind by supplementing your basic damage liability waiver that came with the rental car. Finding out more may be a good idea.

When you rent a car, you may buy daily car hire insurance to protect yourself whilst the car is on rental to you.

What you may think is sensible to buy may be determined to a large extent by where you are going to drive the car.

Often when you rent a car for use in the UK or certain parts of Europe, there may be some collision damage waiver cover included in the deal. (Collision damage waiver (CDW) provides cover for damage to the car itself.) For rentals elsewhere there may be little or no collision damage waiver cover included in the deal and you may think it wise to buy this form of cover for yourself.

CDW cover almost always carries an excess. The excess represents an amount of money that you agree to pay towards any claims. Excess amounts vary between £500 and £1500.

In addition to the excess, CDW often excludes certain parts of the car from cover. These are typically the roof, windows, tyres and undercarriage.

So whether CDW was included in the rental or bought separately, your level of cover may still leave you exposed to facing some potentially large bills. You may feel that purchasing some additional daily car hire insurance to cover the excess and the exclusions may be a sensible idea.

You can of course buy this daily car hire insurance from the car hire company. There are, however, alternative sources for this type of cover that you may find to be considerably cheaper.

There are a number of Internet based insurance providers who specialise in daily car hire insurance cover and excess insurance in particular.

For UK and European rentals, their excess policies may be very attractive, especially when you consider that they may include those ‘excluded’ items at no extra cost.

If your rental is for the USA these specialists may be able to provide you with a full CDW and excess package. If you bear in mind that US rentals are unlikely to include much, if any, third party cover at all, you may also want to have a look at the Supplemental Liability Insurance (SLI) they have on offer. (You don’t need SLI for UK rentals since third party cover has to be unlimited by law).

While you’re browsing these sites you may also find it interesting to have a look at annual cover for your car hire. Annual policies could be a very economical way of buying car hire insurance particularly if you are a frequent or regular renter.

An annual policy insures you, the policyholder, in the same way as any other type of insurance. You may find that the car hire company may still charge your credit card for any due excess amounts if you have an accident and damage the car. All you would then have to do is claim these amounts back on your annual policy.

As with all insurance policies there will be terms and conditions that apply to cover of this nature. As an example, you may find that there are restrictions on the types of car that you can hire. Very high value vehicles, sports and vintage models are not covered but for the majority of renters this may not be an issue.

So if you’re looking for an alternative for your daily car hire insurance why not take a look at what these specialists can offer?

You may be looking for a cheaper alternative to the daily car hire excess insurance offered by the car hire companies. If this is the case, then you may find it useful to have a look at the Internet sites of some of the independent insurance providers who offer exactly this type of insurance cover.

They offer this type of product because of the way that car hire insurance works.

Renting cars

Typically when you rent cars, there are two issues relating to insurance.

The first is if you injure someone, or damage their property, while you are in control of the hired car. This is called Third Party insurance and in the UK where this type of cover is required by law, it provides unlimited cover. This means that no matter the level of costs or damages awarded against you, your third party policy will typically cover them to 100% of their value (up to a provider’s set limit of course).

In some other countries, cover may be limited and in places like the USA there may be no third party cover at all. In these cases you may consider buying Supplemental Liability Insurance (SLI) to increase the amount your policy would pay out to a level more in line with what a court could award. Daily car hire excess insurance does not apply to third party cover.

Where it does apply though, is to the second component of car hire insurance known as Collision Damage Waiver (CDW). Collision damage waiver covers the costs of damage to the hire car itself.

As supplied by the car hire companies and in common with many other types of insurance, collision damage waiver will usually carry an excess. The excess is an amount of money that you agree to pay towards any claim and can range from between £500 and £1600 - quite a lot to find if you do happen to have an accident.

Reducing the excess

Daily car hire excess insurance is optional cover that you buy to remove or reduce the excess attached to your collision damage waiver cover. It is available from the car hire companies but it may be expensive. So it is here that you may find that the prices of cover supplied by the independent Internet based car insurance specialists can be cheaper.

To benefit from the potential savings, you may need to buy daily car hire excess insurance in advance of your rental. You can do this very easily over the Internet. Your policy will then cover you and any other named drivers for your rental. You may find that you have to be the lead driver on the rental agreement.

If you then have an accident in your rental car, the car hire company may charge your credit card with your portion of any repair costs (i.e. the excess) but you would then simply just have to claim this amount back from you daily car hire excess policy.

That’s only part of the story though because in addition to covering the excess, you may find that many excess insurance policies bought from the independent specialists also provide cover for parts of the hire car generally excluded from standard CDW cover.

So damage to the windscreen, tyres, roof and undercarriage (all typically excluded from standard car rental company cover) may be covered at no extra cost by your daily car hire excess insurance - which has to be good news!