The car hire company, as part and parcel of the whole car rental agreement, has traditionally provided daily car hire insurance. The use of ‘daily’ here merely indicates that the insurance is charged at a daily rate for each day of the rental.
There are two main categories of daily car hire insurance although the number of terms used to describe it may make it seem that there are a lot more.
The first, known as Third Party covers injury to someone else or damage to their property or vehicle. By law in the UK, this cover is unlimited and is mandatory. This means that not only will the basic rental cost for the vehicle include this as standard but also that in the event of a claim for damages as a result of an accident; there will be no limit on the amount that the policy will fund. There could still be excess on the cover but there will be no upper limit. Elsewhere in the world, Third Party cover is likely to be limited and in some countries like the USA may be optional. This would mean that if there was a claim for damages greater then the amount (or limit) you insured for then you would be personally responsible for the shortfall. You can purchase a top-up insurance known as Supplemental Liability Insurance (SLI) to increase your third party cover.
The second category of insurance is known as Collision Damage Waiver (CDW) or sometimes Loss Damage Waiver. This provides cover for damage to, or loss of the hire car itself.
Car rental companies will either quote a rate for the car and a separate rate for their car insurance or they may quote an ‘all in’ price that includes a limited level of CDW cover.
The daily car hire insurance provided by car rental companies will almost certainly still leave you liable for the whole cost of damage to those easily damaged areas of a car typically excluded from the main CDW cover, (windscreen, tyres, windows, undercarriage and roof) and for excess charges.
The excess on this type of policy may be anywhere between 500 and 1500 pounds which means that in the event of damage to the car, for example, you have to pay the cost of the damage or the total excess amount which ever was the lesser. The insurance will only contribute to damage costs that are greater than the value of the excess.
It is possible to buy top up insurance, commonly known as Super CDW, to reduce excess charges or remove them completely.
Top-up insurance bought from the car hire company can be expensive and you may find that there are still items excluded from the cover. However it is possible to find this and other types of hire insurance from independent insurance companies.
Daily car hire insurance bought from these specialists can cost you a lot less than the same level of cover bought from the car rental company. It can even cover you for damage to the items normally excluded by other insurers.
You may find it worthwhile to shop around a little for daily car hire insurance rather than automatically taking that offered by the car hire company. The potential savings may pleasantly surprise you.
Tags: Daily Car Hire Insurance