Protect Your Excess

Excess waiver insurance is a type of insurance that applies to rental cars and it could save you money. How?

The excess on rental car insurance
For many people renting cars, the words on the car hire company’s site that say “insurance included” are a source of comfort. Yet this may not be the end of the story.

There are two common forms of rental car insurance:

• third party liability – this provides a financial shield against costs awarded against you following a claim from a third party relating to injury or property damage you may have caused them with the rented vehicle;
• CDW (collision damage waiver) that does the same thing but for any costs you may incur due to damage to (or the theft of) the rental car.

The policy may however carry what’s called an ‘excess’.

The excess is defined as an amount of money, typically between £500-£1600, that the rental company may debit to your credit card following an accident.

It works like this, using an example of an £800 excess. If you have an accident that leads to £1000 worth of damage, you may find £800 pounds of that charged to your credit card and the rental company’s insurance would pay the balance of only £200. Had the damage cost £750 you would have paid it all.

Excess waiver insurance
It would be understandable if you were a little concerned about this. Following an accident you may have little or no control over who assesses the damage to the hire car or who repairs it and for what cost.

You can protect yourself from the risks of an excess charge by taking out excess waiver insurance. This typically comes in two forms:

• purchased from the rental company (who may call it ‘top-up insurance’ or possibly ‘Super-CDW’);
• purchased from an online provider of specialist car rental insurance.

In the case of the former, the rental company’s excess waiver insurance means that they may agree to reduce or perhaps even remove entirely, the excess from their policy.

The specialist providers of excess waiver cover operate by offering you a policy that you can use to reclaim any excess charges you’ve been billed by the rental company. Typically these forms of policy will be cheaper than the cover offered by the car rental companies.
You may also find that the policies of the specialist providers bring added benefits.

Typically the basic CDW insurance provided by a rental company will exclude a number of important areas of the car from its base protection. These may vary but typically include the wheels, tyres, roof, windows and undercarriage. Any damage to those could also result in a charge to your credit card.

The policies sold by the specialist providers may also cover you against these charges. Not only that but they can be purchased on an annual basis. This means that if you rent regularly you could use the one policy for all your excess waiver insurance needs during the lifetime of the policy (subject to terms and conditions). So it could save you even more money!

Using an independent insurance provider for European car rental insurance may make good financial sense - particularly when you consider some of the additional features that are typically available from many of these suppliers.

When you rent a car for the UK and many European destinations, you may find that there will have been some elements of European car rental insurance included in the price. These are likely to be;

• third party insurance to cover injuries to other people or damage to their property, and;
• collision damage waiver to cover damage to the hire car itself.

Collision damage waiver (CDW) as supplied by the car hire companies (whether as part of an all-in-deal or bought separately) is likely to contain two major exceptions as far as cover is concerned.

The first is that CDW typically excludes certain parts of the car from cover. This means that if these parts were to be damaged, then they would not be insured and you would have to pay for their repair. The parts concerned are the windows including the windscreen, the tyres, the roof, wheels and the undercarriage.

The second point is that collision damage waiver will usually carry an excess. The excess represents the amount of money that you agree to contribute to any repair costs for damage to the vehicle even if they are insured. Excess charges can be as much as £1600 depending on the vehicle type and country which you they are hiring in.

You may feel that the risks of being responsible for this level of potential expenditure are unacceptable. In this situation, it may be prudent to buy some additional European car rental insurance to top-up the cover of the basic CDW and to reduce or remove the excess completely - and this is where using one of the independent specialists could make a difference.

These Internet based specialists have a number of European car rental insurance products to cover a variety of circumstances. Their products may offer special deals for families and the over 75s.

In addition they can also provide many of their policies on an annual basis. What this means for you is that rather than buying insurance each and every time you rent a car you may be able to use an annual policy. This could not only save you time but also possibly some money.

Policies of this type can cover most types of vehicle with certain exceptions, such as:

• high value cars in excess of $100,000;
• sports or vintage models;
• motor homes;
• commercial vehicle;
• motorbikes.

This is unlikely to be a problem for most renters.

So if you decide to buy some car rental insurance from one of these independents, all you have to do is to remember to arrange your cover before you rent the car.

Then if you do have an accident, although the car rental company may still charge any excess and other fees to your credit card, you would then simply claim on your European car rental insurance policy for reimbursement. Having this form of insurance may save you money!

Hiring a car may be either fun on holiday or something that’s essential for business. Whichever is the case, it may be important to understand a little about damage liability waiver if you are to be confident that you are well protected by appropriate insurance.

Basic car hire insurance

At the time you book your rental car, the hire price may include some components of insurance.

Depending upon the hire company you’re using and the country of rental, this may range from:

• little or no insurance in places such as the USA;
• third party cover only;
• third party cover and a basic form of damage liability waiver.

Damage liability waiver

This form of cover is sometimes called CDW for ‘Collision Damage Waiver’. It offers you protection against the costs of any damage done to the rental car while you have it on hire. It’s perhaps worth noting that this typically includes cover against theft.

If you do not have this form of insurance protection, you will be personally liable for all costs arising from damage to or theft of the hire car.

If your rental does not include it, you may be able to purchase it from the hire company or possibly at a more competitive rate from an on-line specialist provider of rental car insurance.

Exclusions and Limitations

The damage liability waiver provided by the car hire companies ‘in the price’ will typically come with two significant limitations:

• an excess of typically between £500 and £1500;
• several areas of the vehicle excluded from cover such as the tyres, wheels, roof, undercarriage and windows.

This means that following an accident, even if you have the rental company’s insurance, you may still end up facing some potentially large bills.

Options for additional protection

If you are worried about the extent of your financial exposure as a result of the above limitations, you do have options.

It may be possible to purchase additional insurance from the car hire company that will reduce or remove the excess and possibly also include cover for the typically excluded areas of the vehicle. The rental company may call this something like ‘top-up cover’ or perhaps ‘Super CDW’.

Once again, a cheaper alternative may be to purchase excess protection insurance from the specialist on-line providers of rental car cover. These policies work by reimbursing you for any excess costs that you may have been charged by the car rental company.

These policies also may provide an additional advantage. Not only can they sometimes be cheaper but you may be able to purchase them on an annual basis. This means they will cover any vehicle rented by your during the period – subject to some exclusions for special or exotic vehicle types.

The excess protection insurance offered by the on-line providers of car rental insurance may offer you additional peace of mind by supplementing your basic damage liability waiver that came with the rental car. Finding out more may be a good idea.

When you rent a car, you may buy daily car hire insurance to protect yourself whilst the car is on rental to you.

What you may think is sensible to buy may be determined to a large extent by where you are going to drive the car.

Often when you rent a car for use in the UK or certain parts of Europe, there may be some collision damage waiver cover included in the deal. (Collision damage waiver (CDW) provides cover for damage to the car itself.) For rentals elsewhere there may be little or no collision damage waiver cover included in the deal and you may think it wise to buy this form of cover for yourself.

CDW cover almost always carries an excess. The excess represents an amount of money that you agree to pay towards any claims. Excess amounts vary between £500 and £1500.

In addition to the excess, CDW often excludes certain parts of the car from cover. These are typically the roof, windows, tyres and undercarriage.

So whether CDW was included in the rental or bought separately, your level of cover may still leave you exposed to facing some potentially large bills. You may feel that purchasing some additional daily car hire insurance to cover the excess and the exclusions may be a sensible idea.

You can of course buy this daily car hire insurance from the car hire company. There are, however, alternative sources for this type of cover that you may find to be considerably cheaper.

There are a number of Internet based insurance providers who specialise in daily car hire insurance cover and excess insurance in particular.

For UK and European rentals, their excess policies may be very attractive, especially when you consider that they may include those ‘excluded’ items at no extra cost.

If your rental is for the USA these specialists may be able to provide you with a full CDW and excess package. If you bear in mind that US rentals are unlikely to include much, if any, third party cover at all, you may also want to have a look at the Supplemental Liability Insurance (SLI) they have on offer. (You don’t need SLI for UK rentals since third party cover has to be unlimited by law).

While you’re browsing these sites you may also find it interesting to have a look at annual cover for your car hire. Annual policies could be a very economical way of buying car hire insurance particularly if you are a frequent or regular renter.

An annual policy insures you, the policyholder, in the same way as any other type of insurance. You may find that the car hire company may still charge your credit card for any due excess amounts if you have an accident and damage the car. All you would then have to do is claim these amounts back on your annual policy.

As with all insurance policies there will be terms and conditions that apply to cover of this nature. As an example, you may find that there are restrictions on the types of car that you can hire. Very high value vehicles, sports and vintage models are not covered but for the majority of renters this may not be an issue.

So if you’re looking for an alternative for your daily car hire insurance why not take a look at what these specialists can offer?

You may be looking for a cheaper alternative to the daily car hire excess insurance offered by the car hire companies. If this is the case, then you may find it useful to have a look at the Internet sites of some of the independent insurance providers who offer exactly this type of insurance cover.

They offer this type of product because of the way that car hire insurance works.

Renting cars

Typically when you rent cars, there are two issues relating to insurance.

The first is if you injure someone, or damage their property, while you are in control of the hired car. This is called Third Party insurance and in the UK where this type of cover is required by law, it provides unlimited cover. This means that no matter the level of costs or damages awarded against you, your third party policy will typically cover them to 100% of their value (up to a provider’s set limit of course).

In some other countries, cover may be limited and in places like the USA there may be no third party cover at all. In these cases you may consider buying Supplemental Liability Insurance (SLI) to increase the amount your policy would pay out to a level more in line with what a court could award. Daily car hire excess insurance does not apply to third party cover.

Where it does apply though, is to the second component of car hire insurance known as Collision Damage Waiver (CDW). Collision damage waiver covers the costs of damage to the hire car itself.

As supplied by the car hire companies and in common with many other types of insurance, collision damage waiver will usually carry an excess. The excess is an amount of money that you agree to pay towards any claim and can range from between £500 and £1600 - quite a lot to find if you do happen to have an accident.

Reducing the excess

Daily car hire excess insurance is optional cover that you buy to remove or reduce the excess attached to your collision damage waiver cover. It is available from the car hire companies but it may be expensive. So it is here that you may find that the prices of cover supplied by the independent Internet based car insurance specialists can be cheaper.

To benefit from the potential savings, you may need to buy daily car hire excess insurance in advance of your rental. You can do this very easily over the Internet. Your policy will then cover you and any other named drivers for your rental. You may find that you have to be the lead driver on the rental agreement.

If you then have an accident in your rental car, the car hire company may charge your credit card with your portion of any repair costs (i.e. the excess) but you would then simply just have to claim this amount back from you daily car hire excess policy.

That’s only part of the story though because in addition to covering the excess, you may find that many excess insurance policies bought from the independent specialists also provide cover for parts of the hire car generally excluded from standard CDW cover.

So damage to the windscreen, tyres, roof and undercarriage (all typically excluded from standard car rental company cover) may be covered at no extra cost by your daily car hire excess insurance - which has to be good news!

Hiring a car has never been easier. Most of the major rental companies have Internet sites where you can chose the vehicle you want and arrange your car hire insurance all with just a couple of clicks of the mouse. Some of the hire companies offer all-in-one packages with insurance included and you could be forgiven for thinking that you were automatically getting the best possible deal.

What you may need to think about with deals like this is that the car hire insurance included in the offer is unlikely to provide a level of cover that many people would be happy with, particularly when driving an unfamiliar car in unfamiliar circumstances and possibly on the wrong side of the road.

So what insurance do you need when you hire a car? There are two basic elements to car hire insurance cover.

Levels of protection

The first covers damage or injury you may cause to someone else or to their property, while driving the car. This is known as Third Party cover. The amount of cover that you get ‘included in the price’ may depend on where you intend to drive the car. It may only cover the minimum level of cover required by law in that country.

For example, for rentals in the UK third party cover has by law to be unlimited. This means that in the event of a claim for damages against you there will be no upper limit on what the policy will pay out.

In other countries though, third party cover does not have to be unlimited and in places like the USA it may be practically non-existent. What this means is that in the event of a claim for damages, you would be personally liable for the portion of the damages that your policy did not cover.

The second element covers damage to the hire car itself while it is in your care. This is known as collision damage waiver, which normally comes with a theft component. It will cover the cost of repair or replacement of the vehicle with some major provisions!

Most collision damage waiver policies offered by the rental companies will carry excess. The excess is the portion of any cost for repair etc that you would have to cover personally before the policy would pay out. So if there was a repair bill for damage to the rental car of say 500 pounds and the excess was 400 pounds, then you have to find 400 pounds and the policy would cover the remaining 100.

These figures are for illustration only and you may find that excesses can be anything from 500 pounds to 1500.

Car hire excesses

A general rule of thumb for collision damage waiver policies is the cheaper they are the greater the excess and you may find that your ‘all included insurance’ deal has some hefty excesses attached.

Of course the car hire company will also offer to sell you their own additional car hire insurance products to increase your level of cover. They can offer products to decrease your third party liability or to reduce collision damage waiver excesses.

It’s here though that you may find that your great deal isn’t quite so great after all. There’s no doubt that buying this additional cover from the car hire company is convenient but equally there’s no doubt that it’s several times more expensive than the alternative.

What you may find interesting is that there are a number of independent insurance suppliers who can provide car hire insurance at prices which are much cheaper than those offered by the car rental companies. These specialist suppliers can be found on the Internet and can provide you with online quotes for all of your rental car hire insurance needs including policies aimed at covering the gaps and limitations in the rental companies policies. It you want improved cover and at a lower price, these specialist providers are well worth a look.

Car hire insurance has its own vocabulary that may at times seem intimidating and confusing. One such term that you may have seen mentioned in ‘the small print’ is Car Hire Excess Waiver. What exactly does this mean?

Car hire excess waiver is, in effect, a form of insurance that could save you a lot of money if you are unlucky enough to have an accident with a rented car.

You may perhaps think that the rented car you’re driving came with insurance included in the price or that you purchased insurance with it from the rental company. Why do you need more?

Getting the right protection

The brutal fact of life is that your rental car’s insurance provided by the rental company is probably limited in several respects. One of these is that it carries ‘excess’ – that is a financial amount you will need to pay as a mandatory contribution towards the ‘first part’ of any claims. If that sounds rather complicated, in reality it’s quite simple, if potentially expensive. The typical rental company’s insurance on a hired car will set an excess on the policy of between 500 and 1500 pounds. If you have an accident resulting in damage valued at 2000 pounds and your policy carries 1000 pounds excess, then you will have to pay the first 1000 pounds of the 2000 and the rental company’s insurance will pay the rest. If the damage amounts to say 500 pounds, then you will need to pay it all.

This may not have been quite what you had in mind when you took out the rental company’s insurance in the first place. So is there anything you can do to protect yourself against ‘excess’ risks?

The answer is ‘yes’. Car hire excess waiver is a facility or form of insurance that the rental company may offer you. This will, for an additional cost, allow you to remove or reduce (i.e. ‘waive’) the excess from the policy. The bad news is that insurance like this sold by the rental companies is often several times more expensive than equivalent or even superior insurance sold on the open insurance market by specialist providers of rental car insurance.

Annual or daily cover

These companies also offer car hire excess insurance that means if the rental company charge you excess following an accident, you will be able to claim this back from your own insurance. These policies also have the significant attraction of being sold to you as a policyholder for a period of days (or annually) rather than just for an individual car rental. This means you can use them to protect you against excess charges from car rental companies throughout the period of your policy and for any cars rented (with the exception of certain specialist vehicles such as sports cars).

Purchasing car hire excess waiver insurance from a specialist provider of hire car insurance could save you a lot of money initially and even more money should you be unlucky enough to have an accident in a hire car. You can find these specialist companies on the Internet and it may be worth checking them out.

If you have hired a car, whether the insurance was included in the price or sold to you separately by the car hire company, you probably would like to think you are fully covered. In fact, you are unlikely to be so because of something called car hire excess.

It works like this. Should you have an accident in the hired car, your first thoughts will be of the possibility of injury to you, your passengers or any third parties involved. You may hand the car back confident that the car hire company and their insurance will deal with the financial side of events. Then some weeks or months later you will see a charge to your credit card from the car hire company and it could be anywhere between 500 and 1500 pounds. What’s going on?

The insurance offered by car rental companies usually contains something called ‘excess’ in insurance speak. This is an involuntary contribution towards the cost of any claims that you will be expected to make even if you have their insurance in place. The amount is typically set between 500 and 1500 pounds.

If you have an accident resulting in a claim of say 2000 pounds for damage to the rented car, you will need to pay the excess and the car hire company’s insurance policy will pay the difference. So if the excess is set at 1000 pounds in the case of a 2000 pound claim, you would pay 1000 pounds and the insurance company the second 1000 pounds. If the claim was for say 500 pounds then you would have to pay it all.

It’s worth keeping in mind that even if you have a minor bump, you may have little or no control over who assesses the damage or repairs it and at what cost. There may be a significant risk of finding yourself hit with hefty bills in such a situation if you only have the rental company’s basic insurance.

If you’re unhappy with this position, you have two options.

The first is to pay the car hire company additional sums to increase your level of insurance protection by reducing or eliminating the car hire excess on the policy. They will be happy to do so but be warned – their costs for doing so may be high. The second option is to take out a car excess insurance policy with a specialist provider of rental car insurance. Operating over the Internet, these providers will insure you against car hire company excess charges. Following an accident, if the rental company charges you excess, then you will be able to claim reimbursement of the sums involved from your own policy.

The costs of this type of car hire excess insurance will be far lower than similar insurance offered by the rental companies. The specialist providers have a range of products that can be used to supplement or replace the insurance sold by the car rental companies. If you investigate this further you will see just how this could save you significant amounts of cash.

Hiring a car is rarely a low-cost activity, even allowing for deals and special offers etc. The good news is that you could be able to save very significant amounts of money if you are prepared to take a little time and ‘shop-around’ for your car hire cover insurance. How does this work?

Car rental companies want to sell you insurance! In certain countries such as the USA, the car rental price may include little if any insurance and the rental company will try and sell it to you separately.

In others countries the rental price may include some elements of insurance. Although apparently attractive as a deal, in practice this insurance may be limited. It is very likely to exclude damage caused to several areas of the rented vehicle such as the roof, tyres, wheels, undercarriage and windows. It is also likely to carry a large excess of between 500 and 1500 pounds – the ‘excess’ is an amount the rental company may debit to your credit card as your mandatory contribution towards the cost of any accident even if you have their insurance. You may also find that their insurance covering injury to third parties is set at a maximum payout level that is way below the level of a court award following an accident.

‘Top up’ cover

The rental company’s solution to this situation will be to try and sell you additional ‘top-up’ insurance to increase the car hire cover and reduce some of the above limitations.

The reality of life is that a car rental company’s insurance will usually be several times more expensive than similar or even better insurance purchased in the open insurance market. You can find specialist car insurance providers on the Internet offering far better deals. Their policies are different to those of a car rental company because they will cover you the policyholder for a period of days or even annually. During this period the policy will cover any vehicle you rent with the exception of a few specialist types such as sports or very high value cars (over 100k US dollars).

Their policies often come entirely without excess and may not exclude any area of the rental car from damage, so you are getting better cover as well as a lower price.

Excesses

The specialist providers have numerous policies for car hire cover to fit most circumstances. You can use them to supplement the policies of the car hire company or in some cases to replace them altogether. This insurance can even cover you against the car rental company charging you excess if their vehicle comes with insurance included in the price.

It is always possible to ask a car hire company for a ‘hire only’ price and use your own cheaper and better insurance. Apart from in the case of certain ‘special all-in’ deals, they may be willing to accept your full or partial privately purchased insurance. It could save you a lot of money on car hire cover so it is worth checking out these insurance providers and asking the question of the rental company.

If you hire cars regularly, whether for business, pleasure or both, then annual car hire insurance could be a way of saving yourself a lot of money.

The economics of this are simple. When you hire a car, it may or may not come with various forms of insurance included in the hire price. Whether it does or not will depend upon the hire company and the country you’re renting in.

There are two main types of such insurance. The first of these is called third party and covers you against damage you may to do someone else (or someone else’s property) while driving the rented car. The second form of insurance is called CDW (for collision damage waiver) and this covers you against damage to the rented vehicle itself. You need to be very clear about legal realities of life here – if you do not have insurance on the rental car and suffer an accident resulting in damage or injury then it is you who will have to pay from your own finances.

If the rental company have included one or both of the above insurance types in the cover, you are likely to find that it is limited in several important ways.

It is likely that the policy will contain a large excess of between 500 and 1500 pounds. That is the amount you may have to contribute to the cost of an accident even if you have the rental company’s insurance in place. The CDW policy is also very likely to exclude damage to several areas of the rented car such as the wheels, tyres, roof, undercarriage and glass/windows.

Saving money

Many renters are slightly disturbed by these limitations and purchase additional ‘top-up’ insurance from the car rental company. This can reduce or eliminate the excess and perhaps extend cover to areas of the vehicle normally excluded from the car rental company’s policy.

So how can annual car hire insurance save you money?

It is a fact that the insurance sold by car rental companies is usually several times more expensive than rental car policies sold by specialist insurance providers in the open insurance market over the Internet. You can find policies that will cover you for a period of days (good for individual car hires) or through annual car hire insurance, that can cover you for any cars rented in the period, with the exception of certain specialist vehicle types.

It works simply. If you have a claim on a car rental policy and are forced to pay excess or similar, you can claim this back through your direct policy. Alternatively, you may be able to replace some or all of the car rental companies insurance with your own cover – if there were an accident your insurers would deal with the rental company directly.

Car insurance is a very profitable line of business for the car rental companies and they are understandably not happy to lose it. In fact, you are under no obligation to purchase ancillary ‘top-up’ insurance from them and you can use your own. In countries where the rental price does not include all insurance, you are free to use your own cheaper insurance. Even if the rental price includes insurances, you may be able to ask for a ‘rental only’ price from the car hire company and again substitute your own cheaper and very possibly better cover policy.

So, annual car hire insurance may be worth investigating further, particularly for regular rentals. It may even offer large savings for occasional renters if the cover is taken on daily basis.