When you hire a car you need two types of insurance. One is Third Party which covers you for any damage or injury you may cause to someone else when driving the hire car. The second is Collision Damage Waiver Insurance (CDW) and this covers you for any damage to the hire car itself while it is in your care.
An important thing to remember with collision damage waiver insurance is that even if you have paid out and bought cover from the car hire company, you still may not be completely covered. In fact you could still be liable to pay out considerable sums of money in the event that you have an accident and damage the hire car.
This is because as with many types of insurance buying the basic insurance does not mean that you are fully covered. Insurance often comes with excesses and collision damage waiver insurance is no exception.
Excess
What this means for your rental is that if you are unlucky enough to have an accident in the hire car your collision damage waiver insurance may only cover part of the costs and you would be responsible for the remainder. How much the remainder would be depends obviously on the amount of damage but also on the size of the excess.
As an example, your collision damage waiver policy has an excess of 500 pounds and you unfortunately cause damage to the car that the insurers say will cost 750 pounds to repair. In this case, the insurance company will charge the whole of the excess amount to your credit card and they will contribute only 250 pounds. It may be worth pointing out here that excesses can be as much as 1500 pounds.
Another area where you can find yourself liable for costs is if you cause damage to the parts of the car normally excluded from insurance policies. These parts are the windscreen, tyres, roof and undercarriage; easy to damage and expensive to fix, particularly if you have no say in who does it or at what cost.
You can of course extend the cover of your collision damage waiver policy by buying additional insurance to remove or at least reduce the excess and possibly even include those exclusions.
What you may find though is that if you take the additional insurance offered by the car hire company you will end up paying a lot of money for the additional peace of mind of knowing that you are adequately insured.
An alternative to the car hire company insurance is to have a look at the policies offered by independent insurance providers on the Internet.
You may find that the car hire insurance offered by the specialist insurers will be significantly cheaper than the equivalent insurance offered by the car hire company.
Even if you rental deal includes a basic form of collision damage waiver insurance you can still buy any additional policies elsewhere and benefit from significantly lower prices. Many specialist policies may even include those ‘exclusions’ such as the tyres, windscreen etc as standard.