Car hire excess insurance is something that someone renting a car may wish to consider if they are looking to avoid large and unexpected bills from the car rental company.
Why is this?
At the time you rent a car, you will probably take with it some form of insurance. This insurance may have been included in the basic rental price or you may have paid the car hire company for it separately.
Whichever is the case, it is very likely that the insurance from the car hire company will carry what is called ‘excess’. The excess is sometimes called the ‘first part’ of any claim and it is essentially an amount of money that the renter will need to pay towards the cost of any claims following an accident. It can be thought of as a form of mandatory contribution that the car hire company will expect you to make after an accident or other form of damage to the rented car.
The amount of the excess will vary by company and country. A figure of between 500-1500 pounds would be typical. This would operate on the basis that if you had an accident resulting in damage of 1,000 pounds and the policy had a 750 pound excess, then you would have to pay the 750 pounds. If the total damage came to 650 pounds, then you would have to pay it all. Normally the car rental company would charge this sum directly to your credit card.
Although having excess on a policy is normal practice in many forms of insurance, in the context of rental cars this has proven controversial in the past with some renters complaining that they were charged after rental for repairs to vehicles that were unnecessary and in some cases entirely without justification.
The car rental company may offer additional ‘top-up’ insurance that for an extra cost will allow you to reduce the amount of excess payable – but this can prove an expensive option.
Another and perhaps preferable way to protect yourself against these risks is to take out an additional form of insurance called car hire excess insurance. This can be purchased online from general insurance companies and brokers. It works on the basis that if your rental company charges you excess, you can claim this back from your insurance company and their policy.
Car hire excess insurance is usually considerably cheaper than the equivalent ‘top-up’ insurance offered by rental companies and also carries additional advantages. Firstly because it is sold to you the policyholder rather than a single hire, it can be taken out for a period of days or even a year. This means all vehicles rented by you during that period will be covered. This can be both convenient and a major cost saving.
Secondly, car hire excess insurance purchased from direct insurance companies will typically offer better cover than the basic policy of the car rental company. That’s because most car rental companies will exclude from their policy cover certain areas of the rented vehicle – usually the tyres, roof, wheels, windows and undercarriage. If you damage those areas of the rented car, most probably you will have to pay.
The good news is that car hire excess insurance from your direct insurance company will often also cover these risks and reimburse you if you need to pay the car rental company for damage to those areas. As an option, it may well be worth checking out.