When driving that rental car on a business or private trip, you probably don’t want to be worrying constantly about insurance or what would happen if you had a bump in it. For peace of mind you’ll want to be sure that you have in place the right insurance for rental cars.
Insurance for rental cars isn’t always easy to understand. The terminology can change between rental companies and countries, as in fact can the commercial and risk basis of the policies. That means that it is possible to drive a rented car with insufficient insurance or with insurance that you have paid far too much more. How could this happen?
To begin with, some rental companies in some countries may offer little if any insurance included in the rental price (e.g. the USA). All insurance is purchased separately as optional extras.
In other countries some forms of insurance will be bundled into the rental price. These usually cover the renter against damage caused to the rented vehicle (CDW insurance) or injury/damage caused to third parties (third party liability). Although this may sound ideal, in fact the insurance included in the price by car rental companies is usually very expensive when compared to the same insurance purchased from a direct insurance provider on the Internet.
You can purchase these types of insurance for rental cars from the direct providers and save yourself a lot of money. If the car rental company offer the insurance as optional extras you can decline it and show them that you already have direct insurance cover. If they have it included in the price, some rental companies may agree to offer a revised and lower rental only price without insurance and you can use yours.
Even if the rental price includes insurance that cannot be ‘unbundled’ by the rental company, you may still need to pause for thought. That’s because the car rental company’s basic insurance may come with certain important limitations. Normally these would include things such as some areas of the rented vehicle being excluded from cover, unrealistically low maximum payout levels being set on third-party insurance and large excesses on the policy. The excess is that amount of contribution the car rental company will expect you to make as the ‘first part’ of any claim – it is often between 500 and 1500 pounds.
Many renters are unhappy with these sorts of risks and there are two possible routes to reduce them. The first is to purchase additional ‘top-up’ insurance from the car rental company. This is likely to be far more expensive than the second option which is to purchase comparable cover from the direct insurance providers.
Their policies in those circumstances would reimburse you for any excess or repair costs you had been forced to pay to the rental company. They also have added advantages. As insurance for rental cars purchased from the direct providers is offered for a daily or annual period, it would cover any cars rented by you during that period, subject to terms and conditions. This could offer not only financial savings but also increased flexibility.