Protect Your Excess

You may be looking for a cheaper alternative to the daily car hire excess insurance offered by the car hire companies. If this is the case, then you may find it useful to have a look at the Internet sites of some of the independent insurance providers who offer exactly this type of insurance cover.

They offer this type of product because of the way that car hire insurance works.

Renting cars

Typically when you rent cars, there are two issues relating to insurance.

The first is if you injure someone, or damage their property, while you are in control of the hired car. This is called Third Party insurance and in the UK where this type of cover is required by law, it provides unlimited cover. This means that no matter the level of costs or damages awarded against you, your third party policy will typically cover them to 100% of their value (up to a provider’s set limit of course).

In some other countries, cover may be limited and in places like the USA there may be no third party cover at all. In these cases you may consider buying Supplemental Liability Insurance (SLI) to increase the amount your policy would pay out to a level more in line with what a court could award. Daily car hire excess insurance does not apply to third party cover.

Where it does apply though, is to the second component of car hire insurance known as Collision Damage Waiver (CDW). Collision damage waiver covers the costs of damage to the hire car itself.

As supplied by the car hire companies and in common with many other types of insurance, collision damage waiver will usually carry an excess. The excess is an amount of money that you agree to pay towards any claim and can range from between £500 and £1600 - quite a lot to find if you do happen to have an accident.

Reducing the excess

Daily car hire excess insurance is optional cover that you buy to remove or reduce the excess attached to your collision damage waiver cover. It is available from the car hire companies but it may be expensive. So it is here that you may find that the prices of cover supplied by the independent Internet based car insurance specialists can be cheaper.

To benefit from the potential savings, you may need to buy daily car hire excess insurance in advance of your rental. You can do this very easily over the Internet. Your policy will then cover you and any other named drivers for your rental. You may find that you have to be the lead driver on the rental agreement.

If you then have an accident in your rental car, the car hire company may charge your credit card with your portion of any repair costs (i.e. the excess) but you would then simply just have to claim this amount back from you daily car hire excess policy.

That’s only part of the story though because in addition to covering the excess, you may find that many excess insurance policies bought from the independent specialists also provide cover for parts of the hire car generally excluded from standard CDW cover.

So damage to the windscreen, tyres, roof and undercarriage (all typically excluded from standard car rental company cover) may be covered at no extra cost by your daily car hire excess insurance - which has to be good news!

It’s very easy to just take the insurance offered to you by the car rental company. Whether they’ve included it in the price or try to sell it to you separately, it is tempting just to pay up. That would be a pity though, because you can save yourself a lot of money by looking at alternative sources for your car hire insurance and specifically things such as daily car hire excess insurance.

These opportunities for savings arise because of the nature of rental car insurance. The car rental company’s insurance policies will almost certainly come with something called excess. That is an amount of money you may have to contribute towards the cost of any claims after an accident and it is usually set between 500 and 1500 pounds.

It works like this – you may have paid for insurance but the policy may contain excess of (e.g.) 1000 pounds. You subsequently have an accident that results in damage of 1500 pounds to the car. The rental company’s insurance will pay for 500 pounds of that 1500 and you will receive an additional charge to your credit card of 1000 pounds for ‘excess’. If the claim totalled, say 750 pounds, you would have to pay it all.

If, like many, you don’t like the sound of that very much, then the car rental company will work very hard to try and persuade you to purchase what they may call top-up insurance. This means that, for additional sums of money, they will agree to reduce or remove the excess altogether. At that stage it’s easy just to say ‘yes’ simply for peace of mind and convenience. In fact the rental companies hope you’ll do just that because their insurance is often several times more expensive than the same insurance purchased elsewhere.

The good news is that you have an alternative. There are specialist providers of rental car insurance operating on the Internet. They offer a range of products and policies aimed at rental cars including daily car hire excess insurance. This operates on the basis that if you have an accident and the rental company charge excess to your credit card, you will be able to claim this back from your daily car hire excess insurance policy. This method of cover may be far cheaper than the equivalent offered by the rental company.

As the name suggests, the specialist providers can sell this insurance on a daily or annual basis. What this means is that for the life of the policy you would be covered for any vehicle rented, though you may need to check the conditions as some specialist vehicle types may be excluded. The costs and time savings here could be significant as no longer would you need to engage in debates and form-filling at the car collection desk every time you rent.

The specialist companies operating in the open insurance marketplace also offer many other insurance products that can complement or in some cases entirely replace the insurance offerings of the rental companies. So whether you’re looking for daily car hire excess insurance or for cheaper (and often better) alternatives to the other types of insurance offered by the car hire companies, the specialist providers may be worth checking out.

When hiring a car, you will need some form of insurance. That insurance may be included (in part) in the rental fee or you may have purchased it from the car rental company as a series of separate items. Whichever is the case, this insurance may not protect you from the full costs of an accident in the rented vehicle. You may also need something called Daily Car Hire Excess Insurance.

That’s because the car rental company’s insurance policy will almost certainly come with what is called ‘Excess’. The excess is an amount of money that the car rental company will expect you to pay towards the costs of any claim – even if you have their insurance in place. They may refer to this as the ‘first-part’ of any insurance claim and the amounts can be significant. Depending upon the country you’re renting in and the rental company concerned, the excess can be set anywhere between 500 and 1500 pounds or perhaps even a little higher.

The way it operates is simple if financially painful! If there is a 1000 pounds excess on the car hire company’s policy and you have an accident that results in a 1500 pounds claim, then the rental company will debit your credit card with 1000 pounds as the ‘first part’ of that claim. If the damage happened to result in a claim for only 400 pounds, then you would have to pay it all.

It’s worth remembering that excess charges following an accident with a rented vehicle can prove controversial. You may have little or no control over who assess any damage, who repairs it and at what cost.

Understandably, the excess and the financial risks it constitutes, may make many renters uneasy. There is though a way of protecting yourself against this – daily car hire excess insurance.

Through the rental company, you may be able to purchase additional insurance that will reduce or perhaps eliminate the excess altogether. They may call this ‘excess insurance’, ‘SUPER-CDW’ or more commonly ‘top-up insurance’. Whatever it’s called, it’s likely to be expensive and far more so that the same insurance purchased elsewhere.

If you look through the Internet, you’ll find direct insurance providers who also offer various forms of car rental insurance including daily car hire excess insurance. Their policies are usually very significantly cheaper than the same products sold by the car rental companies. It also works simply – you purchase the insurance for a specified number of days (they also offer policies on an annual basis) and the insurance company would then reimburse you for any excess payments the car rental company may charge you.

These companies offer daily car hire excess insurance policies that are not only cheaper but which also offer other advantages. As they are sold to a policyholder for a period of time, they will cover any vehicle rented during that period (subject to terms and conditions). This could offer major flexibility benefits. It may well be worth making the effort to check out these companies and their products in a little more detail.

Daily car hire excess insurance is a policy that provides cover for any excess charges. The premiums for this type of cover are calculated as an amount per day for the duration of the rental.

When you hire a car, the daily rate quoted for the rental may already include Collision Damage Waiver cover. CDW is the form of cover that protects against damage to or loss of the hire car. If CDW is not included in the rental price then the car hire company will offer it to you at a daily rate for the duration of the rental.

Most car hire insurance policies may carry significant excesses. The excess is the amount of any damage costs that have to be paid by the renter of the vehicle before any claim can be made on the insurance policy.

Excess charges can be high, typically ranging from 500 -1500 pounds. So if your hire car has suffered damage of say 600 pounds and the excess is 500 then you would have to pay all of the excess and the CDW cover would take care of the final 100. If the damage cost 400 then you would pay 400 and the CDW cover would provide nothing.

With a daily car hire excess insurance policy you can significantly reduce or remove excess charges completely.

Your car hire company may offer to sell you this type of insurance and they will normally quote you a price that would be the daily rate for this insurance. Cover of this nature provided by rental companies does tend to be very expensive.

Even with daily car hire excess insurance bought from the car hire company you will still be liable for damage to those items, windscreen, windows, tyres etc. normally excluded from the main CDW policy.

There is an alternative to the insurance cover offered by the car rental companies that can provide better levels of cover in addition to being much less expensive. There are a number of independent insurance companies who specialise in insurance for the car rental market. Many of these companies can be found on the Internet and their policies can be bought directly online.

They can offer the full range of car rental insurance and can even supply these as annual policies that you could use again and again in the course of the year. Their policies will generally include those easily damaged areas excluded by other insurers. They can also provide cover specifically tailored to the varied insurance requirements in the USA, Europe and the rest of the world.

Even if your rental includes basic CDW cover you can still buy daily car hire excess and other top-up insurance independently and you may be surprised at just how much cheaper it can be.

In the event of any damage, the car rental company would either claim directly to your independent insurers or they would make a charge to your credit card and you would then simply have to claim on your daily car hire excess insurance policy for reimbursement.

If you’re looking to hire a car the next time you go abroad, you might be surprised by the incredible complexity of the insurance packages most providers will offer. However, if you do want to hit the road and explore the local (or not so local) area, you’re going to need it; even though it generally doesn’t come bundled-in with your car rental package in places like the USA, they will insist you have some cover before you drive your car off the lot. This can increase the cost of renting a car dramatically, but what’s often worse is the raft of optional policies car hire companies throw at you, including CDW and other forms of daily car hire excess insurance. What do they do? How do you know which ones are worth the money, and which ones (if any) you can afford to do without?

Most of the additional insurance policies are what’s known as daily car hire excess insurance, or supplemental liability insurance, and aim to reduce the amount you’d pay out in excess should you be involved in an accident while you’re driving a rental care. The excess on a policy is defined as the amount you’re contractually obligated to pay out towards repair bills before the insurance company takes over – an excess of, say, £200 means that you’ll pay the first £200 of any repair bill, and the insurance provider will deal with the rest. Unfortunately for those of you planning to rent a car, the excess tends to be set much higher than on your insurance policy back home, and it’s not uncommon to see excesses in the region of £800-1000, or even more. Purchasing daily car hire excess insurance, normally in the form of what’s known as a collision damage waiver policy, will allow you to cut down this excess (although, unless it’s a more expensive ‘Super CDW’ policy, it’s unlikely it will be able to remove your excess completely). However, these additional policies are often in the region of a couple of pounds a day on top of your standard car hire price, and so could end up costing you a not insubstantial amount of money that could be better spent on the business of your holiday – namely enjoying yourself.

One alternative to paying the inflated over the counter prices is to buy online. Checking around the internet for bargains on your insurance is just as valid for car rental cover as it is for anything else, and could save you a good deal of money. While it’s possible to get annual cover (where you’ll be covered on all hire cars you rent for twelve months in return for one payment), you might find it cheaper to still order day by day cover for the amount of time you plan on renting a car for, especially if you don’t plan on travelling abroad or renting a car more than once in that period.

Whatever you choose, daily car hire excess insurance can help put your mind at rest regarding your rental car excess, and let you focus on having fun on your holiday, knowing that you won’t find yourself liable for a huge bill should the car you’re driving be involved in some kind of accident while it’s signed into your name.