Protect Your Excess

If you’re renting a car, you’ll want to know that you have the car rental insurance that’s right for you. In this context, ‘right’ probably means that you’ll be looking for the best possible insurance cover at the lowest possible price. Getting it wrong might mean that you’re not only paying too much for your insurance, but also that it may not provide you with the protection you expect.

In terms of protection, you will probably want to know that you are covered against the two main categories of risk. The first of these covers injuries you may cause to a third party or any damage to their property – this is called third party liability insurance. The second category relates to any damage caused to the rental car while it is in your care – that is called Collision Damage Waiver or CDW for short.

If you have purchased these two forms of car rental insurance cover from your rental company, you may feel that you have the cover you need. Sadly, this may not quite be the case as you could find out following an accident.

How much excess?

If you are renting a car for use outside of the UK, many policies sold by the rental companies will have their third party liability payout maximum capped at a level that may be far beneath the amounts that courts could award following an accident. (In the UK third party liability by law has to be unlimited). You may also find that the CDW insurance excludes from its protection several areas of the vehicle that can be easily damaged and expensive to repair – this often includes the wheels, tyres, windows, roof and undercarriage. It’s also likely that the rental company’s policy will carry excess of between 500 and 1500 pounds, and that’s the amount you may have to contribute towards the cost of any claims.

You therefore have a choice. You can live with these shortcomings and hope you don’t have an accident or you can insure against them.

This is where you may need to start thinking about price. You can take out additional insurance with the car rental company that can increase the third party liability cover and reduce the excess etc. The rental companies often call this ‘top-up’ insurance. This is a real option but it is a very expensive way of dealing with the shortcomings of the rental company’s insurance cover.

Affordable protection is available

Car rental insurance of various types can also be purchased through the Internet from specialist providers of car rental insurance. Their prices will usually be several times cheaper than those of the car rental companies and may very well offer better cover.

You can use their policies in various ways. If your car rental company does not include insurance in their rental price you can purchase your own from one of the specialists and save yourself a lot of money. If the rental company has included basic forms of CDW and third party in the price, you can purchase just your top-up insurance from the specialist and still save money.

Car rental insurance purchased from a specialist provider offers many advantages over the policies and cover sold by the car hire companies and this is not just price related. As an example, because they are sold to you rather than an individual rental agreement, they can be taken out for a period of time. During that period they will cover any vehicle you hire (check the policy for details of certain specialist vehicle exclusions) which can save you not only money but also administration and hassle at the car collection desk. It may be worth having a look at their web sites to see what they’re offering.

Car rental insurance is a subject you should take seriously. Many people have an inclination to spend a lot of time looking for the model they want to hire and what extras to include but then move quickly over insurance without paying it too much attention. If you give into that temptation because insurance as a subject is boring, then you could be in line for some grief!

That’s because at the outset it is important to understand that if you have an accident in a hire car and the circumstances are not covered or not fully covered by insurance, then it will be you that is legally liable. You could be paying out some very large sums of money indeed should that happen.

Many renters think this is impossible because their car rental deal said “insurance included” or they purchased insurance from the car rental company. Unfortunately such insurance is limited and usually contains numerous exclusions.

It may offer cover for third party risks (damage to another person or their property) but in many countries the maximum amount payable may be capped at too low a level given the huge awards a court can make following an accident.

The rental company’s car rental insurance may also provide what’s called CDW (collision damage waiver) to cover against damage to the rented vehicle. Their basic cover though will usually exclude areas of the vehicle such as the tyres, wheels, undercarriage, roof and windows – all areas easily and expensively damaged.

Finally, their policy will almost certainly carry excess. The excess is a financial amount that the car rental company will expect you to pay towards the cost of an accident and it is typically set between 500 and 1500 pounds.

All told, you may find that you still have significant financial risk and exposure arising from your use of a rented car even when you have insurance in place.

There is a solution. You can purchase additional or ‘top-up’ insurance from the rental company. This may reduce excess, increase the amount of liability protection and cover areas of the vehicle normally excluded from damage provisions. The trouble is, this insurance is expensive when purchased from a rental company.

The direct insurance companies selling through the Internet usually provide a cheaper option for car rental insurance. They offer a range of products aimed at things such as car rental excess and liability cover etc. Their insurance is structured so that it is purchased for a number of days (or a year) and it will cover any vehicle rented by you during that period – subject to terms and conditions. This could not only save you a lot of money but it could also save time as you would not longer have to worry about this every time you rented a car. This could be very useful for any renter but particularly those that are planning to rent several times in a period. It may be worthwhile finding out more on this subject and their products and services can be checked out easily via the net.

Many people hiring a car automatically take the car rental cover offered by the car rental company. This could be because many rentals these days are sold with insurance included in the price, simply out of convenience or because that’s how they’ve always done it.

So even if they’ve shopped around to find the best car rental deal available, some people may spend more on insurance than is necessary simply due to convenience or habit. What’s worse is that some people may not even realise that when it comes to car rental cover there is an alternative to the car rental company’s insurance.

If your rental agreement has insurance included the level of cover that it offers may fall far short of leaving you fully insured. Many Collision Damage Waiver policies that come as standard actually carry large excess clauses. The excess is the amount you could be liable to pay if the rental car is damaged and needs to be repaired and can be as much as 1500 pounds. Obviously if the cost of the damage is less than the excess you only pay the actual cost.

Either way though the costs involved could be substantial especially if you bear in mind that you have no control over where or by whom the repairs are carried out. The rental companies are unlikely to shop around to find the cheapest garage to do the repairs.

In addition to the excess, a number of key elements of the car will also be excluded completely from the cover and any damage to these areas, the windscreen, tyres, undercarriage and roof will have to be paid for by you.

The car rental company will be more than happy to sell you additional top-up insurance at a daily rate to reduce your Excess liability. For a very short rental of a day or so, this may not seem like a lot of money but for longer rentals it can all mount up to a substantial sum.

It may make financial sense to shop around for car rental cover and you may be surprised at the savings, which could result. Even if you have a rental deal, which includes insurance, and are only looking for top-up cover for excesses, you can still buy this from one of the independent specialists in car rental cover. These companies can provide as little or as much cover as you want.

The policies that they sell are not just based on a daily rate for the duration of the rental. They also sell annual policies so you can you use the same policy for a number of car rentals in the course of a year and you are not tied in any way to a particular car rental company. These annual car rental cover policies may not to be available for specialist vehicles such as vintage or sports models, or those of very high value. However, provided you are looking for something a bit more ‘ordinary’ then an annual policy could make sense for you particularly if you have plans to rent a car on a number of occasions over the course of a year.

If you’re renting a car, you’ll also be faced with a number of options relating to car rental insurance cover.

In many countries, particularly those in continental Europe and the UK, you will probably find that some elements of car insurance are included in the rental cost. The nature of these may vary between rental companies and countries but it is not unusual to see a basic form of third party liability, theft and collision damage waiver (usually abbreviated to CDW) included in the car rental insurance cover that comes ‘in the price’ with the vehicle.

This means that you will have some cover against any injuries or damage you cause to someone else with the rented car. You will also have some cover against theft of the vehicle while in your care and CDW provides insurance against damage to the car you’re renting.

In a few countries such as the USA, the basic rental price may in fact include virtually no insurance. All car rental insurance cover in such situations will need to be purchased by you separately.

If you do not have these types of insurance in place, or you incur damage or costs not covered by them, you will be expected to pay directly. So, it may be advisable to ensure that these types of insurance are in place and adequate for your needs. Things to check may include

1. Does the third party liability cover offer sufficient monetary protection to cover your costs given the large awards a court may make to someone injured by you when driving?
2. Does the CDW portion cover all areas of the rented car or does it exclude (as the basic car rental insurance often does) damage to areas such as the wheels, tyres, roof, undercarriage and windows? If it does exclude these areas and they are damaged – you will need to pay.
3. Does the policy carry excess? The excess is a financial amount that you will be expected to contribute towards the costs of any claim and it is typically set between 500 and 1500 pounds.

If you are unhappy with any elements of your basic cover as outlined above, you do have the option of increasing or ‘topping-up’ your insurance to cover excluded areas of the vehicle or reducing the excess payable etc. This ‘top up’ insurance can be purchased from the car hire company but you may find this to be an expensive option.

The direct insurance companies that sell various forms of car rental insurance cover online provide an alternative and usually much cheaper option. These companies can provide insurance that will reimburse you for any excess paid to the car rental company; cover areas of the vehicle excluded from the hire company’s insurance and increase the amount of third party liability cover available.
Car rental insurance cover purchased from direct insurers also offers another major advantage. As it is sold to you as a policyholder (the cover can be purchased on a daily or annual basis) it will cover any vehicle rented by you during the life of the policy – subject to terms and conditions etc. If you’re looking to save money and improve your insurance cover, it is an option that may be worth checking out.

Nobody wants to pay over the odds for car rental hire insurance. But neither do they want to pay too little and leave themselves liable for costs in the event of damage to the rental car or to someone else.

Making sense of the confusing array of terms commonly used to describe car rental insurance can be a little daunting. The basic principals though are relatively straightforward.

Third Party Cover covers you for injury to someone else or to his or her property. In the UK this cover is unlimited which means that in the event of a court case, which results in damages against you, there is no upper limit on the amount that your third party cover will pay out. If you’re renting a car elsewhere in the world and particularly in the USA, you may find that third party cover is optional and is almost certain to be limited. In these circumstances it may be advisable to take out Third party top-up insurance also known as Supplemental Liability Insurance.

To provide insurance cover for the rental car itself you need a Collision Damage Waiver policy. Without a policy of this nature you would be personally responsible for the repair or replacement of a damaged or stolen vehicle.

One thing you need to be aware of is that your CDW policy may not cover you completely. Nearly every type of insurance comes with excesses and exclusions and car rental hire insurance is no different.

The excess is the amount of any claim that you agree to pay yourself. Excesses can be anywhere between 500 to 1500 pounds. If your rental car is damaged and is going to cost 1600 pounds to repair, then if the excess is 1500 pounds, that is the amount that you will have contribute to the repair costs.

Car rental companies will offer to sell you top-up or excess insurance to reduce or completely remove your liability to pay any excess charges. This can be very expensive and can add significantly to your car hire costs. It is worth bearing in mind that your excess insurance may still not cover you for damage to those areas of the car like the windscreen and the tyres specifically excluded from cover in the CDW policy.

One way to get the best possible insurance cover is to shop around and compare what other independent insurance companies are offering. Even if you have bought your main car insurance from the car rental company it is still perfectly feasible to shop around for your top-up or excess insurance. Provided you have no plans to hire a high value car or a sports or vintage model, then you may be pleasantly surprised at how much money you could save in addition to getting a superior level of cover – even for those areas of the car normally excluded from other policies.

Car rental hire insurance policies like this can be bought on an annual basis and so can be used again and again in the course of the year (subject to the above mentioned terms) making them very cost effective indeed.

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.

Many of the advertisements for car hire say things such as ‘insurance included’ but in reality the position with respect to the car rental insurance may need closer examination.

Car rental insurance is normally best considered from two points of view. What cover is included for damage done by you to third parties or their property (called third party liability insurance) and what cover is available for damage done to the rented vehicle itself (often called CDW or collision damage waiver).

It is difficult to generalise about the cover that may or may not be included in the basic rental price because the terms and offers will vary by each rental company and the country you are renting in. In most countries the vehicle will be rented with at least third party liability insurance. This is fine, but some caution may be required. That is due to the fact that the third-party cover available is unlimited by law in the UK but in other countries it may be capped at a maximum payout level that is unrealistically low given the high awards sometimes made by courts.

As the renter, you should be clear that if an award were made that exceeds the capped maximum of the third party liability policy, then you would be the one that has to pay the difference.

In some cases the rental company may include CDW to protect against some types of damage to the rented vehicle. This needs to be checked for exclusions such as the wheels, tyres, roofs and windows that are all typically excluded from cover although they are among the most commonly damaged areas of a vehicle. It is also worth examining carefully what’s called the excess. The excess is that amount of any claim that you as the renter will be expected to pay in the event of an accident and amounts of anywhere between 500-1500pounds sterling are not unusual.

If these ‘holes’ in car rental insurance cover are of concern, the good news is that purchasing the supplementary insurances (sometimes called ‘top-up’) can fill them.

It is possible to purchase these additional insurances from the car rental company, who will probably work hard to sell them to you. The additional insurance will allow you to reduce or eliminate the excess, increase your liability cover where appropriate and possibly include under cover those areas of the vehicle normally excluded from standard CDW.

This can be convenient, but it may also prove expensive. It is often possible to obtain equivalent or even superior cover, at a significantly lower cost, by purchasing car rental insurance online from a specialist insurance company or broker. These policies operate differently to those of the car rental company because they are sold to you as a policyholder and not necessarily just for a given car hire. They will cover all and any cars rented by your during the life of the policy (typically a number of days or a year). Should you have an accident and need to pay the car rental company the excess or for damage to an area of the vehicle excluded from the basic cover, these amounts can be re-claimed from the insurance company. It may prove to be a better and cheaper way of getting this type of insurance.

For whatever reason – be it greater freedom of movement, or just a chance to see more of the world – a great many people choose to rent a car when they go on holiday. However, this is often expensive in its own right, even without considering the additional expenditures that can come about as a result of making this decision, including the astronomical costs that can be associated with purchasing car rental insurance.

Car rental insurance when you’re abroad works in much the same way it does in the UK: if you’re involved in an accident or have the car stolen while it’s under your name (that is, while it’s signed over to you by the rental agreement), you’re covered for the cost of the car if you were proved not to have behaved negligently. It’s a way of making sure that you don’t end up being fully responsible for the cost of repairs, which could be an astronomical cost that is likely to be out of your ability to pay – either way, it’s sure to put a dampener on your holiday. However, one crucial way it differs is in the amount you typically pay in excess.

An excess, in terms of both normal car and rental car insurance, is the amount of money you’re liable to pay before the insurance kicks in – say you have an excess of £200, you pay the first £200 of any repair bill, and the insurance company picks up the rest. For car rental insurance purposes, the excess is typically far higher (often up to and above a thousand pounds), which means that any crash or damage could cost you dearly, as your standard package may not be enough to adequately cover you.

So, what can you do? Well, most foreign car rental firms offer a large number of optional policies designed to help you keep your excess and other liabilities under control. These include things like Collision Damage Waivers and Theft Protection, both of which aim to cut down on the amount you’d pay in excess should your car be damaged or stolen respectively. These also come in so-called ‘Super’ forms, which can even cut your excess down to zero, giving you a great deal of peace of mind. While these are the most common forms of car rental insurance abroad, you’ll find that most companies have a great many more options to keep you covered. However, these can be expensive, sometimes to the point where it become economically unfeasible to hire the car in the first place.

One alternative to this is to pre-book your car hire and insurance before you even set foot on the plane. There are many companies that will allow you to purchase your car rental insurance online before you get to your destination, either on a day-by-day basis, or annually. These can save you a massive amount of money if you’re planning on renting cars abroad with any regularity, and so are useful for people who go on holiday more than once a year or who find themselves having to travel on business. Additionally, it lets you make sure you’re all sorted the minute you land at the airport, and so you can start getting on with the business of enjoying yourself right away.