If you’re looking for insurance for rental cars, you will probably find that you are facing one of three situations – depending upon the country you’re renting in and the rental company you’re using.
The first is that in some countries such as the USA, the rental price may include little or no insurance. You will need to purchase it all separately and the car hire will offer their own insurance products as optional extras.
The second situation covers Europe and many countries around the world, in all probability the rental company will include some forms of basic insurance in the rental price.
Insurance for rental cars usually covers third party liability, theft and CDW (collision damage waiver – this covers you for damage caused to the rental vehicle). In countries where insurance is included in the rental price, this almost invariably includes third party liability and theft and MAY include CDW although CDW can also be excluded from the basic rental cost and available as an optional extra.
The third situation covers the nature of the insurance. Whether it comes included in the price or the rental company are selling it separately, the key thing to ascertain is whether or not it provides the cover you need and require.
That’s necessary because the basic level car insurance offered by the car rental companies usually contains potentially significant exclusions and limitations. Third party liability cover must by law be unlimited in the UK, but in other countries the payout level may be capped at an unrealistically low level given the awards courts can make following an accident. The basic form of CDW insurance will usually exclude damage to certain areas of the rented vehicle such as its wheels, tyres, undercarriage, the windows and possibly roof.
The car rental company’s insurance probably will also carry what’s called ‘excess’. This term is used to describe an amount of money that the car rental company will expect you to pay as the ‘first part’ of any claim, and the excess is typically set between 500 and 1500 pounds. If you have an accident that results in a claim of say 1500 pounds and the policy has excess of 1000 pounds, then you’ll have to pay that 1000 pounds. If the damage is 750 pounds, you’ll need to pay it all.
All things considered, many renters feel uneasy about these financial exposures and look to protect themselves by purchasing additional insurance. If you feel the same way, you will find that you have two options.
It is usually possible to purchase additional ‘top-up’ insurance directly from the rental company. The disadvantage here is that this is typically considerably more expensive that similar insurance for rental cars purchased from a direct insurance company.
There are insurance companies online that specialise in insurance for rental cars and they are usually much cheaper than the rental companies. They have policies available that will increase the amount of third party liability cover, cover those areas of the rented vehicle normally excluded by the rental company and which will reimburse you if you need to pay the rental company excess. Their policies are sold on a daily or annual basis so any car rented during the life of the policy will be covered (subject to terms and conditions). These policies could offer not only significant cost savings but also increased flexibility. It may be an option worth investigating.