When you are arranging the insurance for your rental car it may be worth thinking about taking out rental car excess insurance.
This is because with the basic car rental insurance deals available through the car rental companies you are not completely covered and may still be liable for some costs should you be unfortunate enough to be involved in an accident or suffer some damage to the rental car.
Collision damage waiver is the basic insurance providing cover for damage to the rental car. With this type of policy you will still be liable for damage to any areas of the car excluded from the policy cover. These exclusions are likely to include damage to the windscreen, tyres, roof or undercarriage. You may also have to pay excess.
The policy excess is the portion of costs of the damage that you are liable to pay even if you have insurance in place. If the actual costs are less than the excess you pay the actual costs. If they are more you pay the excess amount and the insurance policy covers the rest. So if the policy has 750 pounds excess and the claim for damage totals 1000 pounds, it is you that will need to pay the first 750 pounds of the total of 1000 pounds.
Third party is the basic insurance which covers you for injury to another person or damage to their vehicle or property. Although by law in the UK this means unlimited liability for rental cars, there can still be an excess. So there’s no upper limit for payment on the policy but there may be a lower limit.
Given that excesses can be as much as 1500 pounds you could be liable to pay a substantial amount should you be involved in an incident.
Rental car excess insurance can provide cover against these costs. It can totally remove excess responsibility or at least reduce it.
The car rental company will probably offer to sell you this type of top-up insurance when you pick up the car. They will quote the price as a daily rate and when multiplied by the number of days you are renting the car for, this can end up being a substantial amount.
You may feel that you have no choice but to accept their policy and if you are standing at their rental desk waiting for the keys to the car this may indeed be the case.
If you are prepared to think a little bit ahead, you do have a choice and you may find that it makes sound financial sense to shop around just in the same way as you may have done to find the rental car in the first place.
There are independent insurance providers who specialise in rental car excess insurance. They will have policies to cover rentals in most parts of the world and the requirements of most renters.
They will also be able to offer an annual excess policy which you would be able to use for car rental throughout the 12-month period and you may be surprised at how cost effective this could be if you plan to rent more that once in any one year. They have daily rates as well, which may also be substantially cheaper than the equivalent cover offered by the car rental companies.
As long as you don’t want to rent a sports, vintage or very high value car (check the terms and conditions for specifics) they should be able to meet your rental car excess insurance needs.