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.
Tags: Car Hire Excess