Protect Your Excess

Using an independent insurance provider for European car rental insurance may make good financial sense - particularly when you consider some of the additional features that are typically available from many of these suppliers.

When you rent a car for the UK and many European destinations, you may find that there will have been some elements of European car rental insurance included in the price. These are likely to be;

• third party insurance to cover injuries to other people or damage to their property, and;
• collision damage waiver to cover damage to the hire car itself.

Collision damage waiver (CDW) as supplied by the car hire companies (whether as part of an all-in-deal or bought separately) is likely to contain two major exceptions as far as cover is concerned.

The first is that CDW typically excludes certain parts of the car from cover. This means that if these parts were to be damaged, then they would not be insured and you would have to pay for their repair. The parts concerned are the windows including the windscreen, the tyres, the roof, wheels and the undercarriage.

The second point is that collision damage waiver will usually carry an excess. The excess represents the amount of money that you agree to contribute to any repair costs for damage to the vehicle even if they are insured. Excess charges can be as much as £1600 depending on the vehicle type and country which you they are hiring in.

You may feel that the risks of being responsible for this level of potential expenditure are unacceptable. In this situation, it may be prudent to buy some additional European car rental insurance to top-up the cover of the basic CDW and to reduce or remove the excess completely - and this is where using one of the independent specialists could make a difference.

These Internet based specialists have a number of European car rental insurance products to cover a variety of circumstances. Their products may offer special deals for families and the over 75s.

In addition they can also provide many of their policies on an annual basis. What this means for you is that rather than buying insurance each and every time you rent a car you may be able to use an annual policy. This could not only save you time but also possibly some money.

Policies of this type can cover most types of vehicle with certain exceptions, such as:

• high value cars in excess of $100,000;
• sports or vintage models;
• motor homes;
• commercial vehicle;
• motorbikes.

This is unlikely to be a problem for most renters.

So if you decide to buy some car rental insurance from one of these independents, all you have to do is to remember to arrange your cover before you rent the car.

Then if you do have an accident, although the car rental company may still charge any excess and other fees to your credit card, you would then simply claim on your European car rental insurance policy for reimbursement. Having this form of insurance may save you money!

Europe is a large and diverse continent. Although much of Europe now forms part of the European Union, the position with respect to European car rental insurance may vary by the country of rental and the company being used.

In general, many (though not all) cars rented in Europe will come with some degree of insurance included in the rental price. This differs from the position in some countries such as the USA, where the rental price may include little or none.

The European car rental insurance that is included in the rental price will vary and it should be thought about carefully.

To begin with, in the UK rental cars must have included by law, unlimited third-party liability insurance. This means that anyone who suffers injury or damage to their property because of the rental car will be able to claim and a court could potentially make unlimited awards. In other countries the third-party cover may be capped at a maximum payout level that’s far too low given the size of potential court awards.

Another aspect of European car rental insurance is CDW (collision damage waiver). This is what provides cover for damage caused to the rented car itself. In general, the CDW cover provided by a car rental company will exclude damage caused to several easily damaged areas of the vehicle – usually including the wheels, tyres, undercarriage, roof and windows.

It is also likely to be the case that the car rental company’s policy will carry something called ‘excess’. The excess is a stated financial amount that the renter will have to pay towards the cost of an accident even if they have the rental company’s insurance in place. It works simply. If the excess is set at 750 pounds (and typically it will be between 500 and 1500 pounds) and there is an accident resulting in 1000 pounds worth of damage, then the renter will have to pay the first 750 pounds of that 1000. If the damage is only 500 pounds, the renter will need to pay it all.

For all these reasons, many people taking out European car rental insurance consider supplementary insurance to increase their cover. There are two options for this. The first involves purchasing additional ‘top-up’ insurance from the car rental company. This can reduce the excess and increase cover to normally excluded areas of the car, but it also is typically far higher in cost than comparable insurance sourced elsewhere.

It is also possible to purchase European car rental insurance from direct insurance providers on the Internet. Their prices are typically far cheaper than those of the car rental companies and may offer superior cover. They work on the basis that even if you have CDW included in your car rental price but are subsequently charged the excess or for damage to excluded areas of the rented vehicle, then the direct insurance policy would then reimburse you. They have a range of insurance products for rental cars that will meet most needs and their prices are attractive. It may be sensible to have a look at their offerings.

Insurance requirements for car rentals in Europe vary from country to country, so when you’re looking to take out European car rental insurance you need to make sure that you let your insurer know of all the countries you intend to visit. Italy in particular has more stringent and expensive requirements than many other parts of Europe.

Many people arrange their car hire as part of their holiday package and will accept the insurance offered by the car hire company without giving it too much thought. Indeed many car rental companies now offer deals that include a certain level of Collision Damage Waiver or CDW cover.

What some people do not realise though is that this can be a very expensive way of insuring your rental car. It may also leave the renter liable for significant costs in the event of a claim. This is because European car rental insurance sold through the car rental companies or provided as an all-in deal may carry significant exclusions and excesses.

There are two main components of insurance for rental cars. The first, CDW, covers damage to the rental car itself. Insurance of this type frequently carries what is called ‘excess’, that is the part of any damage costs that must be paid by the renter of the vehicle. In addition, damage to some items, typically the windows, windscreen; tyres, undercarriage and roof may also be excluded from the policy.

The second category, Third Party, covers damage to someone else or to their property or vehicle. This can also carry excess and while by law in the UK, Third Party cover is unlimited; this is not the case in other parts or Europe. What this means is that there may be a shortfall in cover if the amount of liability assessed by the courts is higher than that provided by the insurance policy. This shortfall would then have to be paid by the renter of the vehicle.

While it is possible to purchase additional insurance from the car rental company to increase levels of cover and reduce excesses this can often be very expensive.

An alternative approach is to buy European car rental insurance from one of the specialist independent insurance companies easily located on the Internet or on the High Street.
The cover provided by these companies will generally include those all important easily damaged areas, cover all of the excess and provide generous Supplemental Liability Insurance to top up third party cover.

If your car rental company has provided basic insurance as part of an all-in deal, you may not be able to take advantage of all of the possible cost savings available from an independent insurer. However you are under no obligation to buy the car rental company’s top-up insurance and it is perfectly acceptable to decline this element and purchase it elsewhere.

European car rental insurance cover from an independent specialist can be bought on a daily basis for the duration of the specific car rental or can be bought on an annual basis and used for any number of car rentals within the duration of the policy.

This blog looks at the importance of European car rental insurance. Europe is one of the most popular holiday destinations for many Brits, and with good reason – it has something for everyone. Whether you’re looking for sun and sangria or a bit of culture, there are a thousand different possibilities open to you from many different countries.

If staying in one place isn’t quite enough for you, though, you might be tempted to hire a car for the duration of your stay, and explore the continent a little bit. If you do, though, you’re going to need to make sure you have adequate car rental insurance, which can often be a complex business due to the massive amount of variety that providers can offer. Unlike countries like the USA and Canada, a basic European car rental insurance policy is usually included in the cost of your hire car, but this is likely to be very basic indeed, and so many people choose to purchase extra cover to protect themselves financially.

Outside of your basic insurance package, many providers offer what’s known as supplemental liability insurance, or SLI. SLI packages generally work by reducing the excess on your policy to a more manageable level. The excess on a car rental insurance policy works in much the same way as it does for any other type of insurance – it’s the amount you pay towards a repair bill before the insurance company starts covering you for the rest of it (that is, if your excess was £100, you’d pay £100 of any repair bill before the insurance company chipped in a penny). Unfortunately for anyone planning on hiring abroad, the excess on European car rental insurance policies is usually set very high, often up to £1000. This is far higher than you’d expect on an equivalent policy in the UK, and represents a serious chunk of money for the average policymaker.

Understandably, then, many people are keen to see this cut down. If you choose to purchase an SLI policy, such as collision damage waiver insurance, you can find that your excess will typically go down the more cover you choose to buy; if you plump for the ‘Super CDW’ cover offered by many insurance providers, you could even see your excess removed entirely.

However, these policies can rapidly become quite expensive, as they are charged on a day to day basis and soon add up to a significant sum. One way to beat this is to book your insurance online before you get to your destination. Most online providers who specialise in European car rental insurance will allow you to book either day by day cover (for the specific amount of time you plan on renting a car) or annual policies that will cover you for twelve months on every hire car you rent in that time.

The latter will generally be cheaper if you plan on renting more than one car in that period or will be renting one car for a sustained length of time (for example, if you’re driving cross-continent), but either way you’ll probably find that booking your European car rental insurance online will save you money, giving you a little bit more to spend on your simple holiday or grand European adventure.