Having car hire insurance is essential for peace of mind and, in many countries, compliance with the law.
The car hire insurance that comes included in the rental cost will vary. In some countries such as the USA, it may come with none and all insurance will need to be purchased as an optional extra. In others the rental may come with one or more basic forms of insurance that the car rental company will offer to ‘top-up’ so as to provide more adequate cover – this at additional cost.
The car hire insurance that most renters will consider necessary usually covers three areas. Firstly they will want to know that they are protected against the claims of anyone (or anyone’s property) injured or damaged in an accident. The second area of cover will be that of loss of the rented vehicle, where the loss could arise through theft or fire. Finally, most renters will want to know that the rented vehicle is covered for any damage that may arise while they are driving it (this type of insurance cover for rented cars is often called CDW – Collision Damage Waiver).
It is important to note that anyone driving a rented car without the above forms of car hire insurance will be personally legally responsible for any costs incurred.
The basic forms of car hire insurance than come included in the rental price are often limited in several respects. The third party cover many be limited to a maximum payout amount that could be unrealistically low given the court awards that can be made following an injury. The CDW insurance typically will exclude damage to certain areas of the vehicle such as the tyres, wheels, roof, windows and undercarriage.
Finally, most car rental companies will offer insurance that carries ‘excess’ – this is an amount of money that the renter will be expected to pay towards the costs of any claims on insurance. The amounts vary but figures for the excess of around 500-1500 pounds are typical. This could be a substantial amount to pay following even a minor accident.
Many renters do accept the ‘top-up’ car hire insurance offered by the car rental company. This can increase the amount of liability cover available, reduce the excess on the policy and perhaps cover some of the usually excluded areas of the rented vehicle. This type of insurance though, can prove to be very expensive and there is a much cheaper alternative.
It is possible to purchase various forms of car hire insurance online through specialist insurance companies and brokers. They will typically offer insurance that will increase the amount of third party cover available (often called Supplemental Liability Insurance or SLI) and excess insurance. In the case of the latter, this insurance policy can be purchased to provide cover on a daily or an annual basis. It would reimburse the policyholder for any excess payment they have had to make to the car rental company.
Car hire insurance purchased from a direct insurance company is sold to an individual and during the life of the policy it will cover all vehicles rented, with some exceptions of specialist models such as sports cars of those vehicle of more than 100,000 pounds in value. This could be an ideal option for those seeking the tranquillity of good insurance cover coupled with a reduced price.
Tags: Car Hire Insurance