Archive for the 'CDW Insurance' Category
Repairing cars can be an expensive business. However minor ‘the bump’, the bills generated can be vast. This applies just as much to rented cars as private vehicles and it may be advisable to consider CDW insurance if you wish to avoid some very large charges to your credit card by the rental company for repairs.
CDW insurance (also called Collision Damage Waiver or just Damage Waiver) exists to cover the renter of a hired car against damage that he or she may do to it. CDW insurance may be included in the basic rental cost of the car and when it is not, the rental company will most likely offer it to you as a purchasable extra.
If you do take or purchase CDW insurance from a rental company, you may wish to check two things if you wish to completely avoid the risk of needing to pay out large sums following an accident. The first of these is whether or not the policy carries exclusions. These are usually listed as areas of the vehicle that are not covered by the CDW policy. Typically these cover areas such as the windows, roof, tyres, wheels and general undercarriage. If they’re damaged and listed as exclusions, you will have to pay.
Secondly, remember to check the excess. The excess is normally quoted as a financial amount between 500 and 1500 pounds. It is the amount that the car rental company would expect you to pay as a contribution towards the cost of any claim. In other words, if there is 500 pounds excess and a claim totalling 1000 pounds for damage, you will be expected to pay the 500 pounds. If the damage costs only 300 pounds then you will have to pay it all.
You can pay the car rental company additional sums of money to improve this cover by removing the excess and extending cover to other areas of the vehicle. Most people find though that this additional insurance is extremely expensive when compared to the outside marketplace and other options.
You do not necessarily have to take the car rental company’s insurance. You can purchase CDW insurance from a direct insurance company over the Internet. Their policies will usually be significantly cheaper than those of the car rental company and typically offer better cover. They may well cover all areas of the rented vehicle against damage and come with little or no excess.
Even if you have decided to take the basic CDW that comes with the rented vehicle as ‘included in the price’ you can still purchase additional insurance from the direct insurance companies to protect you against excess charges or repair bills for damage to excluded areas of the car.
These forms of CDW Insurance are usually sold on a daily or annual basis. One of the big advantages of this is that they will cover the policyholder for any vehicle rented during the life of the policy – providing that certain conditions are complied with (e.g. no sports cars). The savings here could be very substantial and it may well be worth exploring further.
Collision Damage Waiver Insurance (usually shortened to CDW Insurance) protects you when hiring a car against the financial costs of damage to the rented vehicle.
It usually forms part of a trio of insurances that most renters wish to know is in place.
The first offers third party liability insurance where a third party says you have damaged them or their property with the rented vehicle. The second covers the vehicle against loss through theft. The third is CDW insurance and that protects you against the costs of damage to the rented vehicle.
Although the principles of CDW insurance are simple, there are some complexities that you may wish to consider when hiring a car.
In many countries the basic rental price will include some form of third party insurance and theft insurance. It may also include a basic form of CDW insurance. Unfortunately the position is not standardised by country or rental company, so what insurance is or is not included ‘in the rental price’ can vary. In most European countries the above will be the case whereas in the USA the basic rental price may include no insurance at all. In the final analysis, you will need to carefully check with the rental company to see what insurance is included in the basic deal.
If CDW insurance is not included in the rental price, the rental company will very probably try hard to sell it to you as an optional extra. Whether the rental company’s CDW insurance is included in the base price or purchased separately, it would be sensible for you to check the level of cover provided and any exclusions.
Two things usually to examine carefully are the excess and damage area exclusions.
The excess is stated as a financial amount that you will need to contribute towards the cost of any repairs etc following an accident. The excess is usually between 500 and 1500 pounds and it is the amount that the rental company could charge to your credit card following an accident.
The exclusions usually relate to parts of the rented car that the rental company’s basic CDW will not cover and these typically include roofs, wheels, tyres, undercarriage areas and windows. If these areas are damaged in an accident, the repair costs will be charged to your credit card.
If the excess and exclusions make you feel uneasy and financially exposed, you do have two ways of dealing with them. The first option is to buy ‘top-up’ insurance that the rental company will probably offer you. This can reduce the excess payable on the basic policy and it may also cover those areas of the vehicle normally excluded. The downside here is that this additional insurance typically is expensive if purchased from the rental company and it will certainly be considerably more expensive that the same cover purchased from the general insurance marketplace.
The alternative is to purchase online CDW Insurance from a direct insurer or broker. The policies offered by these companies will reimburse you for any excess payments you need to make to the car rental company and they will usually also include cover for those areas of the rented car that the rental company may exclude.
CDW Insurance purchased from these sources is typically significantly cheaper than that offered by the rental companies. It is sold on a daily or annual basis and will cover you for any vehicles rented during the life of the policy providing these are not highly specialised (e.g. sports vehicles) or very high value cars (usually 100,000 pounds and above).
Many people choose to hire a car when they go abroad, and it’s not difficult to see why. With an entirely new area to explore, it’s not unusual for people to want to go a little bit further than the hotel bar and experience the sights, sounds and culture of this strange new world for themselves. However, while many places might offer you a fairly good deal on car rental, it’s common to see a long and often confusing list of optional ‘extras’ that you might be tempted by, such as CDW insurance. But how do you know which ones to get, and which ones can you safely disregard in favour of keeping a little bit more spending money?
If you’re planning on renting a car, one of the most important things to consider is the excess that comes bundled with it. The excess for rental cars is very much the same as it is for standard UK vehicles – it’s the amount you pay against a claim before the insurances takes over. Unfortunately, this is often extremely high for hire cars, sometimes in the region of a thousand pounds. Few people would feel comfortable (or even be financially able) to pay that much money against an accident, especially if it wasn’t their fault, and as a result many people choose to take out CDW insurance as an extra precaution.
CDW insurance (also known as a collision damage waiver) is a policy designed to remove some of the excess associated with renting a car. For a premium, it’s possible to shrink the excess in order to ensure that you’re not liable for nearly as much money should you have an accident. Despite this, most CDW insurance policies won’t protect you entirely from having an excess (although many providers now offer a ‘Super CDW’ policy, aimed at removing your excess completely). Whichever you choose, it’s important to remember that the more you pay, the less you’re liable for in case of an accident, but also that these costs can rapidly mount up, especially if you’re planning on renting for several weeks.
One alternative that’s rapidly increasing in popularity is to purchase insurance before you even go on holiday. There are literally dozens of providers that will allow you to make sure you have CDW insurance, either via phone or online, and this can often work out much cheaper than buying it at the counter of the hire shop at your destination. As a general rule, it comes either as a day-by-day policy (based on the number of days you’re hiring the car for) or as an annual cover. While this last one might end up being more expensive if you’re only renting for a short period of time, it’s especially useful for those who expect to rent cars abroad more than once a year, or those who plan on keeping their rental car for longer than two weeks or so. Either way, booking online can save you both money and time, and allow you to maintain your peace of mind while you drive.