Make no mistake – insurance for hire cars is critically important. It may be expensive but if you have an accident in a hire car and you don’t have sufficient insurance, the costs to you could be quite literally ruinous.
There are two main types of insurance that apply here. The first of these is called third party liability. It basically means that you have insurance to cover any claims you may receive if you have injured a third party or damaged their property. In the UK this insurance comes with hire cars and by law it must be unlimited to cope with any court awards however large they may be. Some caution is required in other countries though, because the car rental company may cap the maximum payout level at an unrealistically low amount. Remember that if a court awards an amount higher than the liability cap, it will be you who will have to pay the difference.
The second form of insurance for hire cars is called CDW (Collision Damage Waiver). This gives protection against damage caused to the rented vehicle while you’re responsible for it. This cover usually includes theft protection. Once again, if you do not have this in place and the car is damaged, it will be you who pays.
Car rental companies may include one or both types of this insurance in the rental price or they may invite you to purchase them separately.
Whichever is the case in a given rental, this insurance is likely to be very much more expensive if taken from the car rental company than if purchased from a direct insurance provider through the Internet.
You are under no legal or commercial obligation to take the car rental company’s insurance. In many cases you can decline it and use your own insurance that you have purchased separately, thereby saving yourself a lot of money. If the car rental company have included insurance in a ‘special deal’ price where it cannot be unbundled from the rental cost, you may still need to consider alternative sources of insurance.
The need for this arises from the fact that the insurance for hire cars that the rental companies include ‘in the deal’ may be limited in terms of its cover. It will very likely carry excess (an amount up to 1500 pounds that you would have to pay towards the costs of any accident) and exclude damage to several areas of the vehicle that are typically easily and expensively damaged even in minor accidents.
You can purchase additional insurance for hire cars to cover these gaps and financial exposures from the car rental company but this is likely to again be very expensive. The same type of cover can be purchased from the direct providers at significantly lower cost. Should you be charged excess by the car rental company following an accident or for repairs to a part of the vehicle ‘excluded’ by their policy, you can them claim this back from your direct insurance. It could potentially save you a lot of money.
Tags: Insurance For Hire Cars