When hiring a car for business or pleasure, it’s highly likely that you would like to be as free as possible from worries relating to it. Key to making that happen is having good, solid car rental insurance in place and knowing that it is providing you with the minimum level of cover you feel necessary.
In most countries of the world, your rental car is likely to come with some car rental insurance included in the basic price. In a few countries, most notably the USA, it is possible that the car will come with little or no insurance already included. In such locations, it will be necessary to purchase the insurance separately as an optional ‘add on’.
Whether the insurance is included in the price or has been purchased separately from the rental company, you may find it advisable to check that it covers you for the three main areas of risk. The first of these is for injury or damage caused by you to third parties – this is often called liability or third party liability insurance. The second is for loss of the rented vehicle, most typically caused through fire of theft. The third and final area is for damage to the rented vehicle itself – this is usually called CDW Insurance standing for ‘Collision Damage Waiver’.
You need to be clear that if you are driving a rental car without insurance in one of these categories or if the insurance is inadequate, then you as the renter have the legal liability and would need to pay all the costs following a theft or accident.
Even if the car rental company have provided or sold car rental insurance cover for all these areas, it is likely to be basic insurance and there may still be risks for you.
Much third party liability cover is financially capped at a certain level of maximum payout (although this cover must by law be unlimited in the UK). This level may prove totally inadequate given the large sums that can be awarded by courts following an accident.
The basic CDW provided by the rental company is also likely to exclude damage to certain areas of the vehicle, usually including the tyres, wheels, undercarriage, windows and sometimes roof. These are all areas easily and expensively damaged even in minor accidents.
Finally, the rental company’s car rental insurance is also likely to carry excess of between 500-1500 pounds sterling. The excess is that amount of any claim that you will be expected to contribute following an accident.
These gaps in cover can understandably generate unease in renters. If you wish to reduce or eliminate your risks here, you can purchase ‘top-up’ insurance from the car rental company that will, for example reduce the excess payable or possibly increase the amount of liability cover. Unfortunately these ‘top-ups’ are typically expensive to purchase from that source.
A cheaper option is usually to purchase additional car rental insurance online from a specialist insurance company or broker. These companies offer daily or annual policies that can increase the level of liability cover. They can also provide what’s called excess insurance that means if you do need to pay excess to the rental company following an accident, you will be able to claim this back from your insurance. As a bonus, many of these policies will also cover you for damage to those areas of the car that the rental company may exclude from their cover.
As car rental insurance purchased from an insurance company is sold to you the policyholder rather than a specific rental car, it will cover all vehicles rented by you during the life of the policy – with some specialist exceptions such as performance sports vehicles or those with a value greater than 100,000 pounds. This could be very cost-effective, particularly for those renting regularly.
Tags: Car Rental Insurance