The basic forms of car insurance supplied by a car rental company will most likely still expose you to significant costs in the event of an accident, unless you have in place something called excess waiver insurance.
To understand what excess waiver insurance is and how it could protect you, it’s necessary to explain the basics of insurance for rental cars.
When you hire a car, it may come with some forms of basic insurance included in the price. These insurances may cover third party liability (i.e. the injury or damage you may cause to someone else or their property), theft of the rented vehicle and something called collision damage waiver (CDW) that will cover some of the repair costs should the rented be damaged.
Even if the rental price does not include some or all of these types of insurance, as is often the case in the USA, the car rental company will usually offer to sell these types of cover at additional cost.
Whatever the position, it is usually the case that the basic insurance supplied or sold by the rental company will be limited in one or more important respects. One of these is something called the policy’s excess. The excess is an amount of money that the car rental company will expect you to pay towards the cost of any claim. It operates on the basis that the car rental agreement will specify the excess amount (typically between 500 and 1500 pounds).
Should you subsequently be unfortunate enough to have an accident and the repair costs total 1500 pounds, if there is excess on the policy of 1000 pounds then you’ll have to pay that 1000 pounds as the ‘first part’ of the claim. The rental company will charge it directly to your credit card. If the damage totalled 750 pounds then that total amount will be debited to your card.
Many renters express some shock at the amount of financial exposure and risk involved given they thought they had paid for insurance. There are options available to reduce these risks and one of those is excess waiver insurance.
The car rental company will usually offer for sale various forms of ‘top-up’ insurance that are designed to bridge some of the gaps in their basic cover. One of these will probably be called excess waiver insurance and this essentially means that for an additional cost you will be able to reduce or perhaps eliminate entirely the stated excess on the basic policy.
Excess waiver insurance purchased from a car rental company is likely to be expensive compared to the same insurance available online through the specialist insurance companies. The direct insurers offer policies designed to offer protection for people renting hire cars and this includes covering the excess. They work on the basis that if you have an accident and need to pay excess to the rental company, then your insurance company will reimburse you. This is usually a significantly cheaper route than the insurance offered by the car rental companies.
The direct insurance companies policies also offer other benefits. One of these is that they can be purchased on a daily or annual basis. The advantage here is that as a policyholder owns the policy for the stated period, any vehicle rented by them during that period will also be covered although this will normally not include specialist vehicles such as sports cars or those over a certain value.
If you’re thinking of excess waiver insurance to protect your interests, it may be worthwhile checking out these direct insurers through the net.
Tags: Excess Waiver Insurance