Nobody enjoys the form filling and debates that arise at the car rental desk when collecting that rented car. It doesn’t seem to matter how much information you’ve provided beforehand, there are always issues on insurance and explanations why you need more. There is a way to avoid this – it’s called annual car hire insurance.
The reason this area can become a subject discussion when attempting to collect the hire car is that the car rental company will understand that their basic insurance included ‘in the price’ is limited. They will be checking to make sure that you also understand this fact, and probably will try to sell you additional insurance to plug these ‘gaps’ in the basic cover.
These ‘gaps’ arise because of the nature of the basic car insurance offered by the car rental companies. Whether their insurance is included in the rental price or purchased from them separately as optional extras as is the case in some countries, it is likely to contain a number of exclusions and limitations.
Third party liability insurance is there to cover claims against you from third parties that you have injured them or damaged their property with the rented car. Although in the UK by law the cover here must be unlimited, in many other countries the rental company may stipulate a ‘maximum payable’ sum that is too low when considered in terms of very high court awards often made after an accident.
The car hire insurance should also provide what’s called CDW (collision damage waiver) cover. This will cover you for any damage that may happen to the car while you’re in charge of it. Unfortunately the car rental policy will probably exclude damage caused to several areas of the vehicle including tyres, wheels, roof, undercarriage and windows – all areas very easily damaged even in trivial accidents.
Finally, the car rental company’s policy will almost certainly carry ‘excess’. That is the amount of financial contribution you’ll be expected to contribute towards the cost of any claims. This amount is often set between 500 and 1500 pounds.
When you arrive at the rental desk, the car hire company will be looking to ensure you understand these limitations and probably offering you ‘top-up’ insurance that will reduce the excess or cover additional areas of the vehicle etc. Although this may sound a good idea, in reality the car rental insurance sold by car rental companies is much more expensive than similar or better products purchased elsewhere.
That’s where annual car hire insurance comes in. There are direct insurance companies operating over the Internet that offer a range of car hire insurance products that are invariably very much cheaper than the rental companies. These policies will, for example, reimburse you should you need to pay the car rental company excess or for damage to ‘excluded’ areas of the vehicle.
One of the major advantages of the direct insurers’ policies is that they can be purchased for annual cover. If you are planning to hire cars regularly during a period then an annual car hire insurance policy from a direct insurer could save you a lot of money and avoid the necessity of needing to have the same debate every time at the collection desk!