When hiring a car, many renters will wish to ensure that they are fully covered by insurance. In theory this should be easy, but in reality, the position with car hire insurance can be slightly complicated and one term that is commonly used, yet frequently misunderstood, is ‘CDW excess insurance’.
When you rent a car it may or may not come with significant insurance included in the rental price. Whether it does or not will depend on the hire company you are using and very probably the country you are renting in. It is worth checking several aspects of the basic ‘in the price’ insurance to make sure that it meets your needs and expectations.
Firstly, it should be examined to see whether or not in contains third party liability insurance. This is the insurance that covers you against any damage you may do to other people or their property with your rented car. If included, it would be worthwhile checking whether or not it is only payable to a specified maximum amount. In the UK by law the amount of cover must be unlimited, but in other countries it could be capped at a low level. It should be remembered that court awards to a third party in the event of an accident could be very high – if your maximum cover amount is too low then you will have to pay the difference.
Secondly, the basic insurance included needs to be examined in terms of what protection it gives you against damage to the rented vehicle itself. If it has only third party then your cover is zero and you will have to pay for any damage to it. It is possible that the rental cost will include what’s called ‘Collision Damage Waiver’ or CDW. This means that your rental vehicle will be insured against certain types of damage.
Sadly, that isn’t quite the end of the story though!
Many of the CDW ‘in the price’ offerings of the car rental companies are limited in their cover. Typically they will exclude damage to certain areas of the car and they will carry excess. The excess is that amount of any claim (sometimes called ‘the first part’) that you as the renter will be expected to pay following an accident.
The excess can be high and a figure of somewhere between 500-1500pounds sterling is not unusual. It could be a painful amount to pay if the vehicle suffers damage.
Fortunately, help is at hand. It is possible to take out a form of insurance called CDW excess insurance. What this does is to cover you against the excess amount should you ever have an accident and be asked to pay it.
CDW excess insurance can be purchased from the car rental company, as can increased third party liability cover but this may prove to be an expensive way of doing things.
A cheaper alternative may be found by looking at the specialist insurance companies and insurance brokers online. These companies offer CDW excess insurance policies that cover you the policyholder not a single rental car. That means that, up to the limit set by the provider which is usually 100,000 pounds, they would cover most vehicles rented by you during the life of the policy, subject to the provider’s terms and conditions – and these policies can be purchased for daily or annual cover. Some of these policies have added benefits such as increasing third party liability cover and covering areas of the rented vehicle typically excluded from car rental company insurance. It may be well worth checking out!
Tags: CDW Excess Insurance