Renting a car has never been easier, once you understand all the terminology surrounding insurance. Each car rental company seems to have its own terms to describe their insurance cover. The most commonly used terms are Collision Damage Waiver / Loss Damage Waiver (CDW/ LDW), Supplemental Liability Insurance (SLI), Excess, Rental Car Excess Insurance, Excess Waiver, the Deductible and so on.
Essentially it’s similar in part to the private motor insurance you would take out for your own car. CDW and LDW are terms used interchangeably and together with theft, they cover you against the risks to the rented car through theft or damage caused in an accident. Although CDW will cover damage to the vehicle or its theft, it typically will not cover the theft of the vehicle’s contents.
If you are concerned about the contents of the vehicle, there are insurance policies that will cover this. It is also important to remember that many CDW policies will carry conditions that may exclude cover for damage to the roof, undercarriage, tyres windows or windscreen of the car.
All UK car rental companies must include by law unlimited Third Party cover as a mandatory part of the agreement. In other countries though the third-party cover may be ‘capped’ at a maximum payout level that may be far too low given the risks of high court awards following an accident. SLI is a form of insurance by which this third party insurance can be topped up. SLI is most commonly associated with USA rentals where insurance is optional but where litigation or damage awards may be amongst the highest in the world.
In common with most insurance policies, car rental insurance policies carry excess. The excess is the maximum amount that the renter has to contribute towards the cost of the damage before the insurance company will contribute. So if there is an excess of 600 pounds sterling and the damage amounts to 500 then the renter will have to pay the 500. If the damage on the other had amounts to 750 then the renter will pay 600 and the insurance company will pay 150. Excess levels on policies can range from 500 to as much as 1500 pounds.
Rental car excess insurance provides the renter with cover that pays the excess. For a premium the renter is then protected from incurring potentially very heavy costs in the event of a claim.
All types of car insurance can be purchased directly from the car rental company. These policies are valid only for the duration of the rental. There are alternative sources however that may well be worth considering if you are looking for the most competitive and broadest cover. There are numerous specialist insurance companies and brokers that offer online rental car excess insurance of this type. These companies can offer policies on a daily basis for the duration of the rental or on a longer- term basis such as 12 months. These long-term policies are policyholder as opposed to rental based and this provides cover for the policyholder every time they rent a car within the duration of the policy.
One particular benefit of buying from an independent insurance company is that their rental car excess insurance may cover items normally excluded from many policies. These exclusions include vulnerable and easily damaged parts of the car such as the windscreen, tyres, roof and undercarriage. Purchasing from these companies may give you increased peace of mind at a preferential price!