Rental car excess insurance is something that is designed to help protect you from unexpected shocks and even worse, unforeseen hefty charges to your credit card.
This is not just a theoretical possibility – it can and does happen. Read on to understand how…….
When you hire a car, normally car insurance will be fairly high on your list of priorities. You’ll most likely have checked what insurance is or is not included in your basic rental price and probably made sure that you are covered for third party liability, theft and collision damage waiver (CDW) to cover you against damage to the rental car.
Whether these things were included in the basic rental price or, as in some countries such as the USA, purchased separately, you may think that once they’re all in place that you’re covered against all eventualities.
Sadly, that’s not usually the case. Most of the basic car insurance purchased from the car rental company will come with certain limitations and exclusions that could leave you financially exposed. One of these is something called excess.
The ‘excess’ is an insurance term that is used to describe what is, in effect, a mandatory contribution the car rental company will expect you to make towards the costs of any claims. The amount it is set at will vary by company and country but it is usually between 500 and 1500 pounds. It works on the basis that it is the ‘first part’ of any claim made. In other words, if the excess is set at 750 pounds and you have a claim that totals 1000 pounds, you will have to pay 750 pounds of it. If the claims totals 600 pounds – you’ll have to pay it all.
This is where in the past some renters have received a shock. Although they have car insurance in place, following a trivial accident they have subsequently seen a hefty amount (the excess) charged to their credit card for repairs etc.
To avoid this, it is possible to take out rental car excess insurance. The car rental company sometimes sells this where it may be offered to the renter as one of several forms of ‘top-up’ insurance aimed at bridging gaps in the cover provided by the rental company’s basic insurance policy. This insurance could reduce or eliminate the excess on the policy but it is likely to prove expensive.
The specialist online insurance companies will offer a much cheaper option. They sell a number of hire car insurance policies aimed at improving the cover available to someone renting. One of these will be rental car excess insurance. This will operate on the basis that if you receive a charge to your credit card for excess following an accident, you will be able to claim this back from your insurance company.
These direct insurers sell their policies differently to the car rental companies. The direct policies are sold to you as the policyholder and not a specific car rental. They can be taken out on a daily or annual basis and as such, they have an active life period. This means that any car rented by you during that period will be covered – providing certain specialist types of vehicle are avoided such as sports cars or those over 100,000 dollars in value.
Rental car excess insurance purchased from a direct insurance company can therefore not only saves you money but also very possibly add flexibility, particularly to those renting regularly.