It is a common misconception that all insurance for car hire is included in the basic rental price paid to the rental company. Sadly this is not the case and following an accident you could experience some unpleasant financial surprises unless you check carefully what insurance is in place and how far it covers you.
In many countries, particularly the UK and Europe, rented cars usually come with various forms of insurance cover included in the price. This is often a basic insurance and it may or may not be adequate for your particular needs. In other countries, with the USA being a good example, little if any insurance may be included in the basic price and it is all offered for sale by the rental company as an optional item.
Whatever the normal practice and policy of the car rental company you are using, and the country you plan to rent in, it is likely that the basic insurance supplied or sold by the rental company will have limitations that you may wish to think about.
Firstly, it may have third-party liability insurance that offers you cover against claims from other people whose person or property you have damaged. Unfortunately in many countries this insurance is very limited and may be restricted to a maximum payout level that could be wholly inadequate given the sometimes very high sums that a court may award the inured third party.
Secondly the insurance for car hire often called CDW (Collision Damage Waiver) is intended to provide you with cover against damage caused to the rented car itself. Commonly though, the basic car rental company’s CDW will exclude damage to areas such as the car’s wheels, tyres, undercarriage, windows and roof. If these are not covered, then you will have to pay for any damage to them.
Finally, the basic insurance for car hire provided by a car rental company will almost certainly carry excess of between 500 and 1500 pounds. The excess is a financial amount that the car rental company will expect you to pay as a contribution following an accident. If there is stated excess of 500 pounds and the vehicle is damaged to 1000 pounds in value, then you will have to pay 500 pounds of that. If the damage totals 350 pounds then you will have to pay the whole amount.
If you are unhappy with the insurance limitations and exclusions in your rental agreement, you essentially two options, excluding of course ‘do nothing’!
You can purchase additional insurance to cover these areas from the car hire company. They may offer these to you but you should be aware that these policies are usually very expensive compared to similar policies purchased elsewhere.
Alternatively you can purchase various forms of insurance for car hire from direct insurance companies online. These policies will cover you against the risks outlined above. They can be used to increase the amount of liability cover available to you (this is often called Supplemental Liability Insurance or SLI). They can also cover your excess risks and will reimburse you for any excess payments that you have to make to the rental company following an accident.
These types of insurance for car hire policies are not only cost-effective but also very flexible. That is because they are sold as a policy to you the policyholder. As you can purchase them on a daily or annual basis, they will cover all vehicles rented by you during that period although there will be some exclusions that cover very valuable (over 100,000 pounds) cars and specialist models such as sports cars. All in all, it may be advisable to check this option out.
Tags: Insurance For Car Hire