Many of the advertisements for car hire say things such as ‘insurance included’ but in reality the position with respect to the car rental insurance may need closer examination.
Car rental insurance is normally best considered from two points of view. What cover is included for damage done by you to third parties or their property (called third party liability insurance) and what cover is available for damage done to the rented vehicle itself (often called CDW or collision damage waiver).
It is difficult to generalise about the cover that may or may not be included in the basic rental price because the terms and offers will vary by each rental company and the country you are renting in. In most countries the vehicle will be rented with at least third party liability insurance. This is fine, but some caution may be required. That is due to the fact that the third-party cover available is unlimited by law in the UK but in other countries it may be capped at a maximum payout level that is unrealistically low given the high awards sometimes made by courts.
As the renter, you should be clear that if an award were made that exceeds the capped maximum of the third party liability policy, then you would be the one that has to pay the difference.
In some cases the rental company may include CDW to protect against some types of damage to the rented vehicle. This needs to be checked for exclusions such as the wheels, tyres, roofs and windows that are all typically excluded from cover although they are among the most commonly damaged areas of a vehicle. It is also worth examining carefully what’s called the excess. The excess is that amount of any claim that you as the renter will be expected to pay in the event of an accident and amounts of anywhere between 500-1500pounds sterling are not unusual.
If these ‘holes’ in car rental insurance cover are of concern, the good news is that purchasing the supplementary insurances (sometimes called ‘top-up’) can fill them.
It is possible to purchase these additional insurances from the car rental company, who will probably work hard to sell them to you. The additional insurance will allow you to reduce or eliminate the excess, increase your liability cover where appropriate and possibly include under cover those areas of the vehicle normally excluded from standard CDW.
This can be convenient, but it may also prove expensive. It is often possible to obtain equivalent or even superior cover, at a significantly lower cost, by purchasing car rental insurance online from a specialist insurance company or broker. These policies operate differently to those of the car rental company because they are sold to you as a policyholder and not necessarily just for a given car hire. They will cover all and any cars rented by your during the life of the policy (typically a number of days or a year). Should you have an accident and need to pay the car rental company the excess or for damage to an area of the vehicle excluded from the basic cover, these amounts can be re-claimed from the insurance company. It may prove to be a better and cheaper way of getting this type of insurance.
Tags: Car Rental Insurance