Car rental excess insurance – some potential problems and their solutions
Author: adminCar rental excess insurance is something that you may chose to ignore completely – particularly if you happen to like large and unpleasant financial shocks.
Such shocks are a very real possibility when hiring a car. That’s because the insurance provided by the hire company will, in all likelihood, contain a critical limitation. Buried somewhere in the small print will probably be a clause to the effect that the policy contains ‘excess’ and the excess is usually stated to be a financial amount between 500 and 1500 pounds.
What you may be liable for
What does this mean in practice? Quite simply, if you have an accident that results in a claim then you will have to make a mandatory contribution to the cost – in other words the ‘excess amount’ that is sometimes also called the ‘first part’ of any claim. So if the policy excess is defined in the hire agreement to be 750 pounds and you have an accident resulting in 500 pounds’ worth of damage to the rented car, you should expect to see a charge to your credit card of the 500 pounds because it is below the policy’s stated excess. Should the damage be assessed at 1500 pounds, you will get a charge to your credit card for the full 750 pounds excess.
This is not a theoretical risk but a reality. Accidents happen and the renter may have little or no say over who assesses the damage or repairs it. So you may think you have paid for insurance on the rented car but after an accident you could find yourself anywhere between 500 and 1500 pounds worse off than you anticipated.
You can take steps to eliminate this risk. The first of these is to pay the car rental company for more insurance that will eliminate or reduce the excess on their main policy. They may call this car rental excess insurance or more commonly ‘top-up’ insurance. This insurance though is usually several times more expensive than the alternative.
There are specialist providers of car rental insurance policies that operate over the Internet in the open insurance marketplace. It’s very simple – if you have an accident you may still have to pay the rental company their ‘excess’ but you can claim this back from your own policy. The specialist’s car rental excess insurance is likely to be significantly cheaper than that of the rental company and you may find the cover is rather better.
Superior cover
The cover may be superior because unlike the rental companies, the specialists are selling a policy to you as a policyholder rather than a given car hire agreement. Their policies can be purchased by the day or even annually. During the life of the policy they will cover any vehicle rented by you (though not some specialist types and those of a very high value – check the policy for full details) and this can offer huge cost and flexibility advantages, particularly for those renting regularly.
Car rental excess insurance purchased from a specialist supplier can’t stop you having an accident but it could stop your situation being made even worse by the rental company’s large and unexpected charges to your credit cards. It may be worth making further enquiries for the sake of your peace of mind!