In most countries of the world, by law you will need some form of rental car insurance if you’re driving a hire vehicle.
Typically this will stipulate that you must have a certain minimum level of third-party liability cover so that you can cover a component of the financial consequences of any awards against you should you have injured someone (or damaged their property) with the hire car. In general, the car hire companies will include this ‘minimum third-party cover’ in their basic rental price.
It may be worthwhile being a little cautious. In some countries such as the USA, individual State or national laws may set the required minimum at a very low level. If the rental car comes with say US $25,000 of third party cover and following an accident you have $500,000 awarded against you, then it will be your finances that have to find the balance of $475,000!
In the UK the third-party protection that comes with the rental car insurance as ‘included in the price’ must provide unlimited financial protection by law.
In some countries the rental vehicle may also be provided with CDW (collision damage waiver) included – even where it is not, the rental company will usually offer it to you for sale.
CDW functions to cover you against the cost of any damage incurred by the rental car while it’s on hire to you – and this protection includes theft. Once again, if the car sustains damage and you do not have CDW then it will be you who has to sign some hefty cheques for repairs.
The CDW provided by the rental companies will possibly contain some clauses that may also get you reaching for your chequebook following an accident.
You may find that the policy won’t cover the vehicle in total and that some areas or parts are excluded from cover. It will also typically contain a large excess that may fall in the range £500-£1600. That may be debited to your credit card after an accident as your ‘mandatory contribution’ towards the total cost of the claim.
If you’re uneasy about the risks arising for your wallet as a result of third-party or CDW limitations, you can protect yourself by taking out a little extra insurance.
Typically the car rental cover will offer you what they may describe as ‘rental car insurance top-up’. This means that for an additional sum they may remove the excess and cover the entire vehicle. In countries where it is applicable, they may also offer something called ‘Supplemental Liability Insurance’ (SLI) which can boost the amount of protection you have for third-party claims.
You may be able to achieve the same protection at a lower cost by taking out a policy with an online specialist provider of rental car insurance. If you have one of their policies you would simply recover from them any costs debited to your credit card by the rental car company for things such as excess.
The specialist providers may offer you the opportunity to save some money on your rental car insurance. Checking them out further may be a smart move.
Tags: rental car insurance