Many companies that are trying to sell something will try to make their headline price look at low as possible. One of the techniques some car rental companies use to achieve this is to offer a rental price that ‘includes insurance’ but not to make clear that this insurance also carries car hire excess.
What this means is that if you have an accident, you could still be facing significant costs even though you have insurance in place. This can best be illustrated with an example.
The car rental companies will usually offer insurance against third party liability, theft and CDW (collision damage waiver). CDW is the insurance that covers any accidents that result in damage to the rental car. These insurance types may be included in the rental price as is commonly the case in many European countries, or the car rental company may offer them as separate purchases as is more commonly the case in the USA.
If you hire a car that has its basic forms of insurance provided by the car rental company, then there’s a good chance to the policy will also carry something called ‘excess’ as mentioned above. The ‘excess’ on a policy is the amount of money that the car rental company will insist you pay towards the ‘first part’ of any insurance claim.
The car hire excess is usually set between 500 and 1500 pounds and works simply. If you have 750 pounds excess and an accident results in damage to the rented car of 1500 pounds, the car rental company will charge the 750 pounds to your credit card as your contribution. If the damage totals only say 400 pounds, this is the amount that will be debited to your card.
Although excess is a normal insurance technique, it has proven controversial in the past with car rentals. That’s because if the car is damaged, the renter has little control over who repairs the car and at what cost. That can prove a nasty shock when the charge hits your credit.
If you’d like to protect yourself against car hire excess then the good news is that you can do so. The car rental company will offer to sell you ‘top-up’ insurance that for an extra cost will eliminate the excess from the policy (or reduce it). Unfortunately this insurance can prove to be expensive if purchased from a car rental company.
The direct insurance companies that sell over the Internet offer a more affordable option. They will sell car hire excess insurance that mean should the rental company charge excess to your credit card, the amount concerned can be claimed back from them. These policies also offer numerous other advantages such as policies that are sold on a daily or annual basis. These policies will cover any rental car driven by the policyholder during the lifetime of the policy (subject to terms and conditions). The cost savings and increased flexibility here can be substantial – particularly for those that rent regularly. It may be worth considering.
Tags: Car Hire Excess