Protect Your Excess

When you drive your own car there are two main components of insurance that are typically regarded as essential and the same may be true for insurance for car rental.

In the UK, Third Party cover is a compulsory form of insurance for car rental and by law it has to offer unlimited financial protection. The same is generally true for many parts of Europe too.

If you were to injure someone or damage their property in an accident with the hire car while having such having unlimited cover, then any award for damages against you would be covered by your third party insurance. There are no limits on what could be paid. What this means is that this level of cover is sufficient and you shouldn’t have to buy more.

In the USA and some other rental locations worldwide, you may find that there is no Third Party cover included at all and in these circumstances you may want to consider Supplemental Liability Insurance (SLI) to provide you with some insurance against potential claims for damages. It may be worth bearing in mind that without insurance for car rental of this kind you would be personally responsible for paying for any awards against you.

Collision Damage Waiver (CDW) covers damage to the car itself. Basic CDW cover is very often included as part of an all-in package by the car rental companies. (The USA and some other worldwide destinations are again exceptions to this.)

The trouble with this is that typically the rental companies’ insurance will put an excess on the CDW and this is the amount that they may expect you to pay towards any repair damage. Excess amounts may vary but values between £500 and £1600 are common.

The other problem with standard CDW supplied by a car rental company is that certain parts of the car (the windscreen and windows, the tyres, the roof and the undercarriage) are typically excluded from cover. So if any of these were damaged you would have to pay for the repair – in addition to any excess charges for dents or scratches to the paint work for example.

Unsurprisingly, many people may feel that this represents an unacceptable level of risk and expenditure for someone else’s car. Increasing your levels of insurance for car rental with some excess insurance may help keep risks down.

Excess insurance cover or Super CDW as it is sometimes known, is a policy against which you can make a claim should you be charged excess by the car rental company.

There are a number of places where you can buy insurance of this type including the car hire company itself. However, you may find that the policies of some of the Internet based independent insurance providers may be cheaper than those of the car hire companies. In addition, their policies may also include those “excluded” parts of the car at no extra cost.

If you have a look at some of the web sites you will find a wide range of products for driving in the UK, Europe, the USA and elsewhere in the world.

They can cater for groups of family or friends and if you are a regular renter you may find an annual policy to be of particular interest.

As with all insurance for car rental there are likely to be conditions attached so you may want to have a look at these to reassure yourself that you have the right cover for your needs.

Renting a car these days is easy. With most of the larger companies and many of the smaller ones you can do it over the phone or on the Internet. It’s only when it comes to organising the insurance for car rental that some people can have a problem deciding what it all means and what they do and don’t need.

You will probably need two main categories of cover for car rentals. The first is third party cover which insures you against damage you may cause to someone else or his or her vehicle or property. The second type is collision damage waiver which covers damage to, or the loss or theft of, the rental vehicle.

With both of these types of insurance, if provided by the car rental company, you may find that the cover is not complete and that you would still be liable for some costs. This is because of the excesses and exclusions typically found on both types of insurance for car rental policies.

An excess on the policy is an amount which can be anything between 500 and 1500 pounds, which you would have to pay in the event of damage to the car. So with damage to the car costing say 1000 pounds and an excess of 1250 pounds, you would have to pay for all of the damage. If the damage cost 1500 pounds you would have to pay 1250 and the insurance cover would pick up the remaining 250 pounds. Even though third party by law in the UK has to provide unlimited liability there may still be an excess for that type of cover as well.

As another example, you may also find that damage to certain areas of the rented vehicle is excluded from cover. This could prove expensive following an accident.

It’s also worth remembering that there will be different rental conditions depending upon the country you are renting in and the rental company you are using. Not all countries have unlimited third party liability for example. In many the standard third-party liability insurance is severely limited in terms of maximum payout levels so you may want to make sure that you have additional top-up cover to ensure that you are not landed with astronomical costs should you cause damage or injury to a third party.

You can of course buy additional insurance to cover all of the potential costs of the excesses and other exclusions contained within the car rental company’s standard insurance. The car rental company may well offer such additional cover but this will be expensive and you may well find that you can get it cheaper if you shop around a bit. You almost certainly will have compared the prices of a number of companies for the rental car itself so why not do the same thing for the insurance for car rental?

There are a number of direct insurance providers in the market who specialise in this type of insurance and you may find that you can get a better level of cover for a significantly cheaper cost.

They can offer standard daily rentals or annual policies which can be used for a number of rentals over the 12-month period. Many of their policies will also cover those areas of the car typically excluded from standard collision damage waiver policies.

If the need arises the car rental company will charge any costs to your credit card. All you then need to do is to claim on your direct policy for reimbursement.

The specialist insurance providers may exclude specialist vehicle types such as sports, vintage, or very high value cars but for the majority of renters they should be able to provide significant savings on insurance for car rental.

When renting a car, most people will take the time to scan through what the various car rental companies are offering to ensure that they get the best possible value for money. It seem a little strange therefore that many people will automatically accept insurance for car rental from these companies without even considering if they could have got a better deal elsewhere.

In fact it could be argued that many people don’t even realise that they have the option to shop around and go elsewhere for a good deal on insurance for car rental.

Even if your car rental comes with some insurance included in the price it is unlikely that this will provide an adequate level of cover. Of course, following an accident if you are willing to pay large excesses (the amount of financial contribution you’ll be expected to make – usually between 500 and 1500 pounds) and fork out for damage to windscreens, wheels, tyres and roofs (these are frequently excluded from many car rental company policies) then it’s possible you may find the car rental company’s policies to be perfectly adequate!

It is possible to pay extra to include those ‘exclusions’ or to reduce the excesses payable but this form of insurance can be extremely expensive if bought from the car rental company.

There are insurance companies who specialise in insurance for car rental and who can provide all of your insurance or just top-up cover for excesses at much more competitive prices than those typically found at the car rental desk. These policy types work on the basis that if you have to pay the rental company excess after an accident, you will be able to claim this amount back from your direct insurance policy. The direct insurers in the same fashion will also cover those areas of the rented vehicle that are commonly excluded from the car rental company’s insurance for car rental.

One type of cover that these companies can offer is an annual policy, which covers you the policyholder and not the rental agreement. What this means is that you can use this policy again and again in the course of the year for all your car rentals. It is subject to terms and conditions that generally state (e.g.) that the renter would not be covered for specialist vehicle types such as sports or vintage or those over a certain value.

The independent companies also offer daily rates as well. They also sell other forms of top-up insurance that provide additional covers in area such as third party liability.

If you are being careful about what car rental company to use and looking for the best deal possible, it may be a good idea to apply the same disciplines and techniques in your search for the best option on insurance for car rental. You could save yourself a lot of money; get a more flexible policy and better cover. It may be a good idea to get those fingers tapping and that Internet searching underway!

When looking around for a hire car, many people will check models, prices and special deals, often comparing several car hire companies to find the deal that is right for them. Yet strangely, when thinking about insurance for car rental many people tend not to shop around and take ‘as is’ the insurance sold by the car rental company they have selected.

This may be missing an opportunity and could be wasting money. Contrary to popular belief, the renter is not obliged to pay for the additional insurance offered by car rentals companies and better deals may be available elsewhere.

To look at this, let us think for a second about the insurance for car rental that comes included in the car rental price. In some countries this may be so limited as to be zero. All insurance you require such as third party liability (to cover other parties you may injure in an accident) or CDW (this is insurance against damage to the rented car itself) may have to be purchased separately to the rental cost.

In other countries the rental price may include third party, theft and perhaps even CDW, but this basic cover needs to be examined carefully. It is worthwhile asking whether or not the third party cover is sufficient for your needs because although by law it is unlimited in the UK, in other countries the policy may have a ‘maximum payout’ level specified that could be inadequate. It’s also useful to look at the CDW cover. That’s because typically the basic CDW insurance for car rental provided by a car rental company will exclude several areas of the vehicle from cover such as the tyres, wheels, roof and windows. These are all some of the most commonly and expensively damaged areas of a car even in minor accidents.

It is also highly likely that the basic insurance for car rental that comes from the rental company will carry what’s called excess. The excess is essentially the financial contribution that the renter will have to pay following an accident even if insured. The excess amount will usually be set between 500 and 1500 pounds sterling so if the vehicle is damaged to a cost of 1000 pounds and there is a 500 pound excess on the policy, then the renter will need to pay 500 pounds towards the repair costs.

These gaps in cover can be a serious worry for renters, and the car rental company will very probably try to sell additional or ‘top-up’ insurance to do things such as reduce the excess payable or increase cover to excluded areas of the vehicle etc. This is where many renters just say ‘yes’ and where a little shopping around may save money.

The additional top-up insurance offered by car rental companies can be expensive and significantly cheaper alternatives for this insurance can often be found online through specialist insurance companies and brokers. Their policies work on the basis that if you have to pay the rental company excess following an accident, the insurance company will reimburse you. This also applies to things such as covering the excluded areas of vehicles and increasing third party liability cover if necessary.

Insurance for car rental cover offered by the direct insurance companies and brokers also offers flexibility because it is sold to a policyholder and not just a single rental agreement. This means if the renter takes out an annual policy, this would cover them for all rented vehicles driven in that given 12-month period. This could offer flexibility benefits and again, it will probably save significant amounts of money. As an option, it may be worth checking out.