Protect Your Excess

If you know that you are likely to rent a car a number of times in the coming year, then it may be worthwhile considering buying annual car hire excess insurance cover.

Even if you have purchased damage insurance from the car hire company, it may not provide the cover you expect. You may find that you are still liable to pay fairly high levels of costs should the hire car be damaged.

This is because the standard CDW (collision damage waiver – the damage protection insurance available for hire cars) cover offered by car hire companies often comes with excesses that can be substantial. The excess is the part of any costs of damage to the vehicle that have to be paid for by you, the renter, before any claim is made on the policy itself. So for example, if there is damage to the vehicle costing 800 pounds and the excess is 750 then you would have to pay 750 pounds of the repair bill. If the damage were valued at 600 pounds, you would have to pay all 600. Excesses can range from 500 pounds to as much as 1500.

In addition to excess charges, many CDW policies may also exclude damage to certain parts of the car from their cover. This means that any damage to these areas of the car, typically the windscreen, tyres, roof and undercarriage, must be paid for by you.

In these circumstances, it is unsurprising that many people feel that it is a sensible step to try to remove or at least reduce the excess amounts they would be liable for by taking out excess insurance, which can also be known as Super CDW. However even if you buy car hire excess insurance from the car hire company that has significantly reduced any excess payable, you may also find that damage to the windscreen, tyres etc is still excluded from the policy.

An alternative to the daily excess insurance on offer from the car hire company is an annual insurance policy supplied by an independent specialist insurance company.

Annual car hire excess insurance cover differs from that supplied by the car hire company in that, as the name suggests, it is an annual policy which ‘belongs’ to you the policyholder and is not tied in to a specific car rental. It can therefore be used for any number of car rentals within the yearly duration of the policy provided that the car being rented meets the agreed criteria. Very high value cars, vintage cars and sports cars are likely to be excluded from this type of cover and the full details will be contained within the terms and conditions.

Annual excess insurance policies are readily available for your car hire needs in the UK, USA, Europe and elsewhere. The car rental company will charge any costs to your credit card and all you have to do then is to claim on your annual car hire excess insurance policy for reimbursement.

Even if you do not intend to rent a car on more than one occasion during the year, you may find that you could still save a lot of money with an annual car hire excess insurance policy. Knowing that your policy covers all parts of the car can bring much valued peace of mind.

If you rent cars regularly, then annual car hire excess insurance may be something worth considering as a way of saving what could be considerable amounts of money.

When renting cars, many people find that the car rental company’s insurance has within it something described as ‘excess’. This is usually stated as a financial amount – typically between 500 - 1500 pounds or the equivalent in local currency.

This means that if you were unlucky enough to suffer an accident that subsequently involves an insurance claim, the car rental company and their insurance company would expect you to pay the excess as the ‘first part’ of any claim settlement. In number terms, if the excess is stated to be 1000 pounds and an accident results in damage to the tune of 1500 pounds, then the car rental company will charge the 1000 pounds excess to your credit card. If the damage is valued at 750 pounds, the charge to your credit card will be for the full amount of 750 pounds.

Many renters find this level of financial exposure to be disconcerting and look to cover this with additional insurance. It is usually possible to purchase additional ‘top-up’ insurance from the car rental company but this may prove very expensive compared to similar products sold by direct insurance companies – usually online.

The direct insurance companies and brokers offer annual car hire excess insurance policies that are geared up to helping renters save money in these areas – particularly those who are renting cars regularly. Their policies can be purchased on an annual or daily basis and will provide cover for the excess that exists on many car rental insurance products. If a claim arises, the policyholder may still have to pay the excess to the car rental company but can then claim this back from their own insurance policy.

Annual car hire excess insurance may also provide additional cover. For example, many car rental policies will cover the renter for damage caused to the rental vehicle but exclude from this commonly damaged areas such as the wheels, roof, tyres and windows. Many annual car hire excess insurance policies will include cover for these items and reimburse you if you have to pay for damage to them.

It is also the case that the third party liability insurance that comes in the basic rental car insurance is often limited in terms of the maximum amount covered. The coverage may not be sufficient considering the very large awards that can be handed out by the courts. Many of the direct insurers will offer products and policies that can significantly increase the cover, and peace of mind, in this important area.

One of the major advantages of annual car hire excess insurance is that it is sold to you the policyholder for a specified period. As such, while the policy is in force and providing the basic conditions are met, it will cover all vehicles rented by the policyholder, with the exception of specialised vehicles such as sports cars or those that are of exceptionally high value – usually over 100,000 pounds. This could be both very convenient and economical and it may be worth investigating further.

If you’re looking to go abroad in the near future and think you might be interested in hiring a car, you’re going to need to consider how you’re going to arrange the insurance. In many countries, standard insurance packages are lumped in with the car deal, but this isn’t always the case – and even if it is, there are often a great many additional policies available (such as day to say or annual car hire excess insurance) that can confuse the average buyer. How do you know which ones are worth buying, and which aren’t?

Generally speaking, these additional policies fall under the umbrella term of supplementary liability insurance, or SLI, and work as a means of lowering the excess that is attached to your rental car insurance policy. The excess on a hire car works in much the same way as an excess on any other type of insurance – if it’s set at, for example, £150 and the repair bill after an accident comes to £200, you’ll be liable for the first £150 and the insurance company will pay the remaining £50.

One of the downsides of renting a car abroad is that the excess attached to the basic insurance policy you sign up for is likely to be much higher than it might be back in the UK, for your usual automobile. It’s not unusual to find excesses on policies that run to between £800 and £1000, and sometimes even more than that – a sum of money that could cause a real financial burden for many people.

Car hire excess insurance (or, more specifically, collision damage waiver insurance) will allow you to shrink your excess to more manageable levels; indeed, if you get a ‘Super CDW’ insurance policy, you could even cut it down altogether. The downside to this approach is that it’s often very expensive – even though CDW cover might only come to a few pounds a day, that’s on top of the cost of renting a car in the first place, and as such it might build up to a considerable amount of money over the course of even a short holiday.

One way to beat this is to book annual car hire excess insurance online before you even set foot on a plan. Annual car hire excess insurance allows you to book an SLI policy that will last for a full twelve months, and will cover you for any hire car you rent in that time. As such, it’s especially useful for people who plan on going on holiday and renting a car more than once in that time, or people who have to go abroad and rent cars for business fairly regularly. While it’s also possible to book daily SLI policies online, annual car hire excess insurance is likely to work out cheaper for at least some people, and so it’s important to do a comparison. Either way, you’ll likely find savings by booking online, freeing up some of your hard earned cash and allowing you to have the peace of mind that comes with car hire excess insurance without costing you a fortune.