When renting a car, most people wish to be sure adequate insurance is in place. SLI stands for Supplemental Liability Insurance. It is one component of the insurance available for rental cars and it exists to increase the insurance cover available to deal with third party claims.
To understand why SLI may be useful, it is necessary to consider the three main categories of car rental insurance cover as they are usually described.
These are usually described in relation to the risks they protect the renter against. Third party liability insurance is there to cover claims arising from a third party who the car renter has injured in an accident or who has had their property damaged by the rented vehicle. Theft, as the name implies, insures the rented vehicle against being stolen. CDW (Collision Damage Waiver) provides insurance against damage caused to the rented car.
All these elements of rental car insurance are important. In some countries a basic form of all these insurances may be included in the basic rental car price or in others (notably the USA) they may not be and the car rental company will endeavour to sell them to the renter separately as optional extras. Whether they were included in the rental price or purchased separately from the rental company, there is a strong possibility that they will offer only limited cover.
In the case of the basic third-party liability insurance that is taken from car rental companies, this will often be capped at a maximum payout level (although this does not apply in the UK where this insurance must be unlimited by law). If the third party liability insurance is capped at an unrealistically low level, this may constitute a massive financial risk for the renter.
That’s because if a third party is badly injured in an accident, a court may make very large damage awards against the renter. To put this into clear context – if the liability insurance of the basic car rental company’s policy is capped at 100,000 US dollars but a court awards sums significantly higher than this in damages, then the renter will be left needing to find the difference.
The position with regard to the financial risks for the renter here are complex and will vary depending upon what hire company is being used and what country the rental is taking place in. Even so, it is clear that the costs here could potentially be ruinous if the insurance limits are set too low.
This is where SLI operates. SLI is a form of insurance that can be taken out to increase the maximum amounts payable under third party liability cover in the sad event of an accident. It can be purchased from the car rental company as an additional option but this can prove to be very expensive when compared to other routes.
There are direct insurance companies that also offer SLI, usually also over the Internet. These companies will provide an SLI policy that will increase the cover available often up to a maximum level of 1 million US dollars. As they are sold on a daily or annual basis, they will also cover the renter for all vehicles rented during the period, with the exception of some categories of car such as sports or those that have a very high value such as prestige marques of over 100,000 pounds in value.
Investigating the SLI policies sold by the direct insurers may give the renter confidence and peace of mind at an affordable price.
Tags: SLI