These days hiring a car is relatively easy. Many of the bigger companies offer facilities on the Internet and try to make things as simple and straight forward as possible. Some of these even offer attractively priced deals, which include car hire insurance.
If you are tempted by these offers it may be sensible to carefully check out just what level of insurance cover is included in the price. The consequences of being underinsured in the event of an accident can be serious.
At first glance car hire insurance can seem to be a complicated business. Terms like CDW, LDW, SLI and Super CDW are all bandied about but what exactly do they mean and how much insurance do you actually need?
When you drive your own car, you need to be covered for damage to your car and you need to be covered for damage to someone else’s person or property. When you hire a car your car hire insurance needs to give you the same basic cover.
Collision Damage Waiver CDW also known as Loss Damage Waiver (LDW) provides cover for damage to or theft/loss of the hire car.
Many CDW policies carry excesses and exclusions, which limit the amount of cover that they provide. Excess amounts can range from 500 to as much as 1500 pounds. This means that if the hire car suffers 1000 pounds of damage and there is an excess of 750 pounds, then you would have to pay for the first 750 pounds. Your CDW policy would cover only the remaining 250 pounds.
Most CDW policies will also specifically exclude from cover damage to certain areas of the car. These exclusions are typically the most easily damaged parts of the car like the windscreen, tyres, roof and undercarriage.
It is possible to buy top up insurance to reduce excess liability and increase levels of cover. This is commonly known as excess insurance or excess Waiver insurance
Third Party Insurance provides cover for damage to someone else or to their car. By law all cars rented in the UK must have unlimited liability third party insurance so the policy will have no upper limit for any damages awarded against you. This is not the case elsewhere in the world and particularly in the USA where third party insurance can even be optional. In these countries you may want to think about topping up the third party cover offered and this type of policy is known as Supplemental Liability Insurance or SLI. Super CDW is also a term used to describe this facility.
It may be tempting to buy additional or top-up car hire insurance from the car hire company either when you make the booking or when you pick up the keys of the vehicle. This may not be the best solution however either in terms of price or in terms of the cover provided. Specialist insurance companies easily found on the Internet can offer much more attractive deals for car hire insurance and their excess top-up policies can cover those items generally excluded from other policies by the car rental companies.
Tags: Car Hire Insurance