Protect Your Excess

When you hire a car the type of insurance that you need falls into two categories. The first is the insurance that you need to cover other people and their property for damage that you may cause them whilst you are driving the hire car. This is known as Third Party Insurance. The second is the cover you need for damage to the car itself. This is known as a Collision Damage Waiver or CDW insurance policy.

CDW insurance can also be known as Loss Damage Waiver. When you take out a CDW policy you are in fact waiving or surrendering your responsibility for paying for the repair or replacement of the hire car.

Very few CDW policies will provide complete cover and you may find that you are still liable to pay substantial amounts in the event that the car is damaged and has to be repaired or replaced.

This is because CDW policies normally come with an excess. The excess defines an amount of money which your insurer would expect you to pay toward the cost of repairs to the hire car before the policy would come into play. So if your policy stipulated an excess of 500 pounds and the damage to the car came to 600 pounds you would have to find 500 pounds and your policy would pay the remaining 100. If the cost of the damage was 400 pounds you would have to pay for it all.

Excesses can be fairly substantial. Amounts anywhere between 500 and 1500 pounds are not uncommon.

Exclusions

There may also be exclusions on a CDW policy. These exclusions refer to areas of the car, typically the windscreen, roof, tyres and undercarriage, which the policy won’t cover if they get damaged. The repair of these items can be expensive particularly when you have no control over who carries them out or at what cost.

The good news is that you can buy additional insurance to remove or reduce the excess. This excess insurance can also be called CDW excess or Super
CDW.

If you buy collision damage waiver insurance from the car hire company, it will almost certainly come with a high excess and the top up insurance they may offer to reduce this excess will be expensive. Even then you may still be liable to pay for any damage to those ‘excluded’ items.

There are other sources of CDW insurance for hire cars. There are independent insurance providers in the market place some of whom have internet sites where you can quickly and easily get a quote for your hire car insurance needs.

Even if you have hired a car with insurance included in the price you can still buy your top up or excess insurance from a specialist provider. You may even find that the policies sold by these suppliers will also cover as standard, the items excluded by many of the policies sold by the car hire companies.

Nobody likes to spend more than they have to for CDW insurance so it may be worthwhile to check out the independent suppliers. You may be surprised at how much you could save.

If you have hired a car and taken out the appropriate insurance, you may understandably think that there is little or no possibility of ‘unexpected costs’ coming from the car rental company. Unfortunately you could be mistaken – even if you have purchased from the hire company something called Collision Damage Waiver insurance.

Collision damage waiver or CDW, is a form of insurance that covers you, the renter, against any costs arising from an accident than damages the rental car. CDW may be included in the rental price or in some countries, most notably the USA, the rental company may offer it to you as a separately chargeable option.

If the rental company have not bundled CDW into the rental price, it may be worth thinking about buying it from a specialist provider of car rental insurance. Such companies operate in the open insurance marketplace, usually on the Internet and often sell various forms of rental car insurance at far cheaper prices than the car rental companies.

What to look out for

If you have taken or purchased your collision damage waiver insurance from a car rental company, you may have to watch two aspects of their policy cover and this is where the risks of unpleasant surprises and additional costs come from.

It is highly likely that their insurance will not cover all areas of the rented vehicle and may exclude the wheels, tyres, windows, undercarriage and roof. The second potential issue relates to the subject of policy excess. The car rental company’s policy will almost certainly carry excess to the value of 500 to 1500 pounds. That is the amount the rental company could bill you following an accident as your ‘obligatory contribution’ towards the cost of any accidents even if you have their insurance in place.

So even if you have only a minor accident AND you have the rental company’s collision damage waiver cover in place, you could still find yourself with a large and unexpected charge to your credit card for repairs. This does happen and when it does, the amounts can be high – so be warned!

You can pay the car rental company for additional insurance that may reduce or remove the excess and possibly cover the often-excluded areas of the vehicle.

Buying it independently

The good news is that if you have purchased your CDW from a specialist provider then there may be no areas of the vehicle excluded from their policy and another large bonus is that their policy may also not carry excess. This could work out far cheaper than paying for additional ‘top-up’ insurance through the rental company.

One final point relating to the collision damage waiver products sold by the specialist insurance providers is that they are sold for a period of time (a daily or annual basis) rather than a specific car rental. What this means is that the policyholder can use their insurance to cover any vehicle they rent during the lifetime of the policy, with the exception of some specialist vehicles such as sports cars or those over 100,000 US dollars in value. It may be worth finding out more through one of these web sites if you’re interested in saving yourself a lot of money.

Collision Damage Waiver (sometimes abbreviated to CDW) is a form of insurance that applies to rental cars. It is often referred to in car rental company insurance documents and at times it can lead to confusion though in fact it is quite simple.

When you rent a car you will most likely have various forms of insurance included in the rental price, or purchased separately. As per normal private motoring insurance, these will cover your rental agreement and car usually for three types of mishap.

Third party liability insurance protects you against claims from third parties such as someone you have injured in an accident or someone whose property you have damaged. If renting in the UK the maximum payable under this cover is unlimited by law but in other countries the rental company may impose a financial cap on payouts. You may need to check to ensure that this level is realistic and sufficient for your needs given the high levels of damages that courts can award following an accident.

The vehicle should also be covered for theft.

Finally, the rental car should be insured against damage itself. It is this type of insurance that is called collision damage waiver.

Collision damage waiver insurance purchased ‘as standard’ from a rental company is very likely to contain a number of exclusions and limitations that you need to look out for. Firstly, it usually will exclude from cover damage to various parts of the rented car such as the roof, undercarriage, wheels, windows and tyres. These are all very easily damaged even in minor accidents and the repair costs can be high – particularly as you may have little or no say in when or through whom the vehicle is repaired.

Many basic car hire insurance policies will also have as part of their terms something that’s called the excess. The excess is a normal component of many forms of insurance and it relates to an amount of money that you will have to pay following an accident even if you have the car rental company’s insurance in place. Although it is not restricted to car insurance, the excess amount on many car rental companies’ insurance policies may be high – usually between 500 and 1500 pounds. The stated excess is an amount of money that you may have to pay as the ‘first part’ of any claim.

If you are not happy with the degree of cover offered by the car rental company’s basic collision damage waiver policy, you have two options. You can purchase additional insurance from the car renters. Often called ‘top-up’ insurance, this may reduce the excess payable on the policy and also cover those areas of the vehicle excluded from the basic cover.

Many renters find this additional insurance from the rental companies to be expensive and look to the direct insurance companies and brokers for a more affordable and better alternative.

These companies offer collision damage waiver excess policies online. They work on the basis of covering the gaps in the standard basic insurance available from the rental companies and are usually very significantly cheaper. If you have an accident and have to pay excess to the car rental company, you will be able to claim this back from your insurance policy.

The collision damage waiver excess and associated policies sold by the direct insurers can be purchased on a daily or annual basis. They will cover all vehicles rented by you during the life of the policy, providing you avoid specialised vehicles such as sports cars or those that are over 100,000 pounds in value. It may well be worth your time investigating this option, particularly if you rent cars on a regular basis.

Collision damage waiver (or CDW) is a form of insurance that applies to car rental and car rental insurance cover. It is easy to become a little confused by the various insurance options, terms and conditions that car rental companies often brandish around. This confusion can easily mean unnecessary expense so it may be worth taking a minute to consider the insurance position with respect to rented vehicles.

If you are driving a rented vehicle, you have two different types of risk that you probably will need insurance to cover. The first type is third party liability. If you have an accident that results in injury to another person or damage to their property, you will have to pay from your own finances unless you have third party liability insurance in place. Remember – court awards to third parties following an accident can be very high so it is usually advisable to check carefully that the insurance is in place and adequate for your needs.

The second type of risk is related to damage to the rented vehicle itself. Even a small accident could result in bodywork damage running into thousands of pounds/dollars/euros. Once again you will have to pay this yourself unless you have insurance in place.

The insurance that covers damage to the rented vehicle is called collision damage waiver (CDW) or sometimes it may be referred to as loss damage waiver. This insurance will cover some forms of damage to the rented vehicle.

It is difficult to generalise about what sorts of insurance will be included in the rental price because practices here vary by rental company and the country of rental. You will need to check the specifics of this on a rental-by-rental basis.

If collision damage waiver is not included in the basic rental price, the rental company will usually offer it as an optional and chargeable extra. Whether it is included or not, it probably will contain two limitations. It may well exclude damage to certain areas of the vehicle such as the tyres and wheels and additionally it may carry excess.

The excess is the first amount of any claim that you the renter will be expected to pay. The amount here may be anywhere between 500-1500pounds sterling.

Most car rental companies will again offer ‘ top-up’ insurances that may allow you to increase cover to other areas of the vehicle excluded from basic CDW as well as reducing the excess amount. These top-up insurance can prove expensive.

It may be worthwhile looking closely at the collision damage waiver and collision damage waiver excess policies offered by direct insurance companies and insurance brokers. These policies will cover you against many of these risks and frequently offer additional benefits such as increasing the level of third party liability.

They work on the basis that the policy is sold to the policyholder for a period of time, typically daily or annual. They will cover all vehicles rented by the policyholder during that period. Should an accident arise, the policyholder may still need to pay the car hire company the excess but this can then be claimed back from the insurance company.

Collision damage waiver insurance purchased from a general insurance company or broker online will usually be significantly cheaper than if the same insurance is purchased from a car rental company. It may well be worth a look.

Renting a car is a great way to see the world when you’re on your holiday. Whether you’re cruising through the States, driving around Europe to soak up a bit of culture or just trying to make it as easy as possible to catch all of the theme parks in Orlando, it can make your holiday so much easier – after all, it’s often much less complicated than alien public transport systems, is faster and less tiring than walking and can save you a fortune compared to taxi fares. However, if you’re going to rent a car, you’re going to need to make sure you’re properly insured against damage or theft, or any little bump or scratch you receive could turn into the beginnings of a surprisingly expensive nightmare.

Car insurance for rental cars works in very much the same way as it does for non-rented vehicles, with the exception that the excess is generally much higher – often in the region of several hundred pounds or more. This means that, should you be involved in an accident of some description, you’re liable for much more of the repair bill than you would be otherwise; if, for example, your excess is £400, you’ll pay the first £400 of any repair bill before the insurance company pays even a penny towards it. While this might be useful if you write the car off completely, it still leaves you open to a great deal of expense for minor repair jobs.

The alternative to this is to buy optional cover, known as a Collision Damage Waiver, or CDW. The aim of a Collision Damage Waiver is to lower your excess, in order to prevent you from having to pay out quite so much in the event of an accident. This is generally quite a costly additional premium, but the more you pay, the lower your excess will generally become; a ‘Super CDW’ or ‘Super Collision Damage Waiver’ policy is likely to completely remove any possible excess, leaving the insurance provider to pay for the whole repair bill (should you not be found to have been driving negligently), but can prove very expensive.

An alternative to paying for your collision damage waiver at the rental counter is to pre-book it before you even get to your destination. There are a great many online companies and services that will allow you to do this, either on a day by day basis (where you take out cover for the specific length of time you plan on hiring the car) or as an annual policy. While the annual policy route may sound more expensive, it’s generally not priced at very much higher than other periods of cover, and so can be well worth it if you’re planning on renting more than one car abroad during the year. Either way, you can expect booking your collision damage waiver online to cost much less than getting it over the counter at the car rental outlet, giving you more money – and time – to spend enjoying yourself once you get to your destination.