Protect Your Excess

When driving a rented car, most people want the reassurance of knowing that they are well protected by insurance. One form of rental car insurance is called CDW (Collision Damage Waiver) and it offers protection against the costs of any damage caused to the rented vehicle. Unfortunately the CDW sold or offered by car rental companies does not, in itself, offer full protection from such costs. To ensure you are fully covered will mean taking out CDW excess insurance.

That may sound slightly confusing and to some extent it is! The problem arises because of the nature of the basic CDW insurance sold (or included in the rental price) by the car hire companies.

This insurance will almost always come with what’s called ‘excess’. The excess is an amount of money that the rental company’s insurance will expect you to pay towards the cost of any claims – even if you have their CDW insurance in place. This amount is usually set between 500 and 1500 pounds and may even be higher in some cases.

How it works

To illustrate how the excess works, let’s take the case of a policy that carries 750 pounds excess. If you have an accident that results in a 1000 pounds claim, then the rental company will charge your credit card with 750 pounds excess which they may call ‘the first part’ of the claim. They would recover the remaining 250 pounds from their insurance company. If the damage cost ‘only’ 500 pounds – then you would pay it all.

The excess is rarely popular and many renters look for ways of covering this via additional insurance. This is where the idea of CDW Excess Insurance comes in.

There are specialist suppliers of rental car insurance that operate on the Internet and in the open insurance marketplace. One of the many products they offer is CDW excess insurance and it works on the basis that if you have to pay the rental company excess following an accident then you will be able to claim this back from your policy.

The car rental company will probably also be very keen to sell you such insurance that they will probably call ‘top-up’ or ‘Super CDW’ cover. In reality, their prices for this insurance will probably be several times higher than the specialist providers – and you are under no obligation at all to purchase your rental insurance from the hire company.

What is covered

It’s worth keeping in mind also that the rental company’s CDW insurance usually excludes from its cover a number of areas of the vehicle such as wheels, tyres, roof, undercarriage and windows. The policies of the specialist suppliers may well include these in your ancillary cover. Their policies can also be taken out for a year or for a number of days meaning they will cover any vehicle you hire during the period (with some exceptions such as sports or very high value cars etc).

You may or may not think that purchasing CDW excess insurance from a specialist provider makes sense. It will depend upon your circumstances and views of risk etc. It may though prove sensible to compare their policies and offerings to those of the hire company. You may be amazed at how much money you could save at the same time as improving your cover.

In order to ensure that you are fully covered to drive your rental car you may want to consider taking out CDW Excess Insurance.

With a typical CDW or Collision Damage Waiver policy, you may find that there are still excess costs for which you would be liable in the event of the rental car being damaged.

These costs can be high, as excesses can range from between 500 and 1500 pounds. So for example if there is an excess of 750 pounds on your CDW policy and your rental car suffers damage that is going to cost 800 pounds to repair, then you would be liable to pay 750 pounds. If the damage were valued at 500 pounds you would have to pay the total amount.

Car rental companies will offer to sell you CDW Excess insurance to remove or at least reduce the amount of your excess. They will normally quote the costs of this insurance as a daily rate for the duration of your rental and this can amount to a considerable sum being added on to the total cost of the rental.

Typical CDW policies also tend to exclude damage to certain parts of the car from their cover. These are areas like the windscreen, roof, undercarriage and tyres, which are also the most likely to suffer damage. Even if you take out an excess insurance policy, you may find that you are still liable to meet the cost of damage to any of these areas.

There is an alternative to the CDW Excess Insurance offered by the car rental companies. There are a number of independent insurance companies who specialise in car rental and CDW excess insurance and you may find it worthwhile to compare their costs and levels of cover against those of the car rental companies. Even if your CDW cover has been provided by the car rental company it is still possible to look elsewhere for top up or excess insurance and you may be surprised at how much cheaper it can be.

There are a number of other advantages apart from cost savings. CDW Excess policies from independent companies often include cover for those easily damaged ‘exclusions’ providing additional peace of mind that there will be no unforeseen costs to meet.

The independent companies can supply CDW excess insurance cover on a daily basis but also as an annual policy, which can be used again and again over the course of the year. Provided you meet their conditions on the types of car that can be rented (no vintage models, sports cars or cars of very high value etc) then an annual policy could save you a lot of money particularly if you intend to rent a car more than once in the yearly period.

They have CDW Excess insurance policies available for most worldwide rental locations including the UK and have products suitable for all age ranges.

If you have independent insurance and your rental car is damaged, the rental company will charge the costs to your credit card. All you have to do for reimbursement is to claim on your CDW Excess Insurance policy.

When you rent a car, you probably want to believe that you are covered against the costs of any accidents arising. You may have paid the car rental company for insurance or been told it is included in the price, and hope that this is an end to the story. Sadly this may not be the case unless you have also purchased something called CDW Excess Insurance.

When you rent a car, it may come with something called Collision Damage Waiver or CDW for short. CDW is that component of the rental car insurance that covers damage to the hire car while it is in your care. Whether CDW was included in the basic rental price or purchased as an optional extra from the rental company, there is a fair chance that the rental company’s basic CDW will have one or two limitations that may be worthy of attention.

Firstly, it may not cover all areas of the rental vehicle. To the surprise of some renters, most basic CDW will exclude from cover, damage to areas of the vehicle such as the roof, wheels, tyres, undercarriage and windows. These can all be expensively and easily damaged even in minor accidents. If they are not covered by your CDW policy then you will need to pay.

Secondly, most basic CDW will also carry something called excess. The excess is a financial contribution that you the renter will need to make following an accident – even if you have CDW in place. The excess is usually between 500 and 1500 pounds and it works simply. If you have an accident and the cost of repair is 1000 pounds, if there is a 750 pounds excess on the policy then you’ll have to pay 750 pounds. If the cost of the damage is 600 pounds, then you’ll have to pay it all.

Many renters feel less than happy about these limitations and risks to their financial wellbeing. Fortunately there is an answer – CDW excess insurance.

The car rental company may well offer to sell you additional insurance sometimes called ‘top-up’. This insurance may mean that you can effectively reduce or perhaps eliminate the excess and perhaps cover some areas of the rented vehicle that are usually excluded.

This type of insurance purchased from a car rental company is usually expensive. A perhaps more economic options is offered by the direct insurance companies that offer CDW excess insurance online. These companies offer policies that work on the basis of reimbursing you for any excess charges you may have to pay the car rental company following an accident. Typically these policies will also cover you for any repair costs you have to pay the rental company for damage to those often excluded areas of the vehicle such as the wheels etc.

One of the other major advantages offered by a direct insurance company selling CDW excess insurance is that they sell their policies to you the policyholder. The policies can be purchased by either the day or on an annual basis. As such they will cover any vehicle rented by you during the life of the policy – with the exception of some specialist vehicle types such as sports cars or motor homes or those that are very high in value (usually over 100,000pounds). This flexibility can save you both time and money. It may be an option worth exploring.

When hiring a car, many renters will wish to ensure that they are fully covered by insurance. In theory this should be easy, but in reality, the position with car hire insurance can be slightly complicated and one term that is commonly used, yet frequently misunderstood, is ‘CDW excess insurance’.

When you rent a car it may or may not come with significant insurance included in the rental price. Whether it does or not will depend on the hire company you are using and very probably the country you are renting in. It is worth checking several aspects of the basic ‘in the price’ insurance to make sure that it meets your needs and expectations.

Firstly, it should be examined to see whether or not in contains third party liability insurance. This is the insurance that covers you against any damage you may do to other people or their property with your rented car. If included, it would be worthwhile checking whether or not it is only payable to a specified maximum amount. In the UK by law the amount of cover must be unlimited, but in other countries it could be capped at a low level. It should be remembered that court awards to a third party in the event of an accident could be very high – if your maximum cover amount is too low then you will have to pay the difference.

Secondly, the basic insurance included needs to be examined in terms of what protection it gives you against damage to the rented vehicle itself. If it has only third party then your cover is zero and you will have to pay for any damage to it. It is possible that the rental cost will include what’s called ‘Collision Damage Waiver’ or CDW. This means that your rental vehicle will be insured against certain types of damage.

Sadly, that isn’t quite the end of the story though!

Many of the CDW ‘in the price’ offerings of the car rental companies are limited in their cover. Typically they will exclude damage to certain areas of the car and they will carry excess. The excess is that amount of any claim (sometimes called ‘the first part’) that you as the renter will be expected to pay following an accident.

The excess can be high and a figure of somewhere between 500-1500pounds sterling is not unusual. It could be a painful amount to pay if the vehicle suffers damage.

Fortunately, help is at hand. It is possible to take out a form of insurance called CDW excess insurance. What this does is to cover you against the excess amount should you ever have an accident and be asked to pay it.

CDW excess insurance can be purchased from the car rental company, as can increased third party liability cover but this may prove to be an expensive way of doing things.

A cheaper alternative may be found by looking at the specialist insurance companies and insurance brokers online. These companies offer CDW excess insurance policies that cover you the policyholder not a single rental car. That means that, up to the limit set by the provider which is usually 100,000 pounds, they would cover most vehicles rented by you during the life of the policy, subject to the provider’s terms and conditions – and these policies can be purchased for daily or annual cover. Some of these policies have added benefits such as increasing third party liability cover and covering areas of the rented vehicle typically excluded from car rental company insurance. It may be well worth checking out!