When you are examining your car hire insurance, you will probably see that it is stated as being subject to ‘car hire excess’ or just ’excess’. It is important to understand what this means.
When renting a car in most countries, you may be reassured to see that the rental price includes insurance. This insurance will usually cover third partly liability, theft and collision damage waiver (or CDW as it is known). Together these insurances will offer cover against injury or damage you cause to another party or the property of another party, the risk of theft of the car, while CDW covers against the risk of damage to it.
In some countries, most notably the USA, the basic rental price may include none of these insurance products and you would need to purchase them all as optional extras.
The basic ‘in the price’ insurance provided by many car rental companies will usually carry what’s called excess. The car hire excess is a financial amount that the rental company will expect you to pay as the ‘first part’ of any insurance claim. In most cases the car rental company will set the car hire excess at an amount between 500 and 1500 pounds.
This works on a simple basis. If the rental company state the excess to be 1000 pounds, then if you have an accident and the claim total is 1500 pounds you will have to pay the first 1000 pounds of this amount. If the claim is 900 pounds, you will have to pay all of it.
In such unfortunate circumstances, the care rental company will usually charge the excess amount directly to your credit card.
Many renters feel uneasy about driving a rented car that has a large car hire excess on the insurance policy. The good news is that taking out additional insurance called ‘top up’ or perhaps ‘car hire excess insurance’ can reduce this risk. There are two ways of doing this.
Firstly, you will probably find that the car rental company will be keen to sell you additional insurance that may reduce the excess amount or possibly remove it entirely. Although perhaps useful, this insurance is usually expensive and significantly more so than the alternative option.
The second option is to purchase car hire excess insurance and related insurance cover from a direct insurance company online. They offer a variety of products aimed at the car rental market and in this particular case, they will offer policies that protect you against the excess payments charged by the car rental companies. Following an accident, if the car rental company charge excess to your credit card, you would be able to claim this back from your insurance policy.
Car hire excess insurance policies purchased from a direct insurance company are not only cheaper but also frequently more flexible. You can purchase them on a daily or annual basis and they cover you the policyholder rather than a specific car rental. This means that you can use them to cover you for any vehicle rented during the lifetime of the policy, with the exception of certain vehicle types such as sports cars or those of over a certain amount. This could be very convenient and flexible – particularly if you are renting regularly.
Tags: Car Hire Excess