Nobody wants to pay over the odds for car rental hire insurance. But neither do they want to pay too little and leave themselves liable for costs in the event of damage to the rental car or to someone else.
Making sense of the confusing array of terms commonly used to describe car rental insurance can be a little daunting. The basic principals though are relatively straightforward.
Third Party Cover covers you for injury to someone else or to his or her property. In the UK this cover is unlimited which means that in the event of a court case, which results in damages against you, there is no upper limit on the amount that your third party cover will pay out. If you’re renting a car elsewhere in the world and particularly in the USA, you may find that third party cover is optional and is almost certain to be limited. In these circumstances it may be advisable to take out Third party top-up insurance also known as Supplemental Liability Insurance.
To provide insurance cover for the rental car itself you need a Collision Damage Waiver policy. Without a policy of this nature you would be personally responsible for the repair or replacement of a damaged or stolen vehicle.
One thing you need to be aware of is that your CDW policy may not cover you completely. Nearly every type of insurance comes with excesses and exclusions and car rental hire insurance is no different.
The excess is the amount of any claim that you agree to pay yourself. Excesses can be anywhere between 500 to 1500 pounds. If your rental car is damaged and is going to cost 1600 pounds to repair, then if the excess is 1500 pounds, that is the amount that you will have contribute to the repair costs.
Car rental companies will offer to sell you top-up or excess insurance to reduce or completely remove your liability to pay any excess charges. This can be very expensive and can add significantly to your car hire costs. It is worth bearing in mind that your excess insurance may still not cover you for damage to those areas of the car like the windscreen and the tyres specifically excluded from cover in the CDW policy.
One way to get the best possible insurance cover is to shop around and compare what other independent insurance companies are offering. Even if you have bought your main car insurance from the car rental company it is still perfectly feasible to shop around for your top-up or excess insurance. Provided you have no plans to hire a high value car or a sports or vintage model, then you may be pleasantly surprised at how much money you could save in addition to getting a superior level of cover – even for those areas of the car normally excluded from other policies.
Car rental hire insurance policies like this can be bought on an annual basis and so can be used again and again in the course of the year (subject to the above mentioned terms) making them very cost effective indeed.