If you have hired a car, whether the insurance was included in the price or sold to you separately by the car hire company, you probably would like to think you are fully covered. In fact, you are unlikely to be so because of something called car hire excess.
It works like this. Should you have an accident in the hired car, your first thoughts will be of the possibility of injury to you, your passengers or any third parties involved. You may hand the car back confident that the car hire company and their insurance will deal with the financial side of events. Then some weeks or months later you will see a charge to your credit card from the car hire company and it could be anywhere between 500 and 1500 pounds. What’s going on?
The insurance offered by car rental companies usually contains something called ‘excess’ in insurance speak. This is an involuntary contribution towards the cost of any claims that you will be expected to make even if you have their insurance in place. The amount is typically set between 500 and 1500 pounds.
If you have an accident resulting in a claim of say 2000 pounds for damage to the rented car, you will need to pay the excess and the car hire company’s insurance policy will pay the difference. So if the excess is set at 1000 pounds in the case of a 2000 pound claim, you would pay 1000 pounds and the insurance company the second 1000 pounds. If the claim was for say 500 pounds then you would have to pay it all.
It’s worth keeping in mind that even if you have a minor bump, you may have little or no control over who assesses the damage or repairs it and at what cost. There may be a significant risk of finding yourself hit with hefty bills in such a situation if you only have the rental company’s basic insurance.
If you’re unhappy with this position, you have two options.
The first is to pay the car hire company additional sums to increase your level of insurance protection by reducing or eliminating the car hire excess on the policy. They will be happy to do so but be warned – their costs for doing so may be high. The second option is to take out a car excess insurance policy with a specialist provider of rental car insurance. Operating over the Internet, these providers will insure you against car hire company excess charges. Following an accident, if the rental company charges you excess, then you will be able to claim reimbursement of the sums involved from your own policy.
The costs of this type of car hire excess insurance will be far lower than similar insurance offered by the rental companies. The specialist providers have a range of products that can be used to supplement or replace the insurance sold by the car rental companies. If you investigate this further you will see just how this could save you significant amounts of cash.
Tags: Car Hire Excess