Buying rental car excess insurance from one of the Internet based independent car hire insurance suppliers may not only save you some money, but may also provide you with superior cover.
Rental car excess insurance is needed because typically the collision damage waiver (CDW) cover sold by the car hire companies tends to carry an excess.
This ‘excess’ represents the maximum amount of money that you could be expected to contribute to the repair costs of those parts of the car covered by the CDW. The exact figure will depend on the car and the car hire company but figures between £500 and £1600 are not uncommon.
If you add to this the amount that you may have to pay towards the repair costs of those parts of the car typically excluded from the CDW (the roof, tyres, windows and undercarriage) then you could be facing quite a large charge to your credit card.
As an example, during your rental you swerve into a bush to avoid hitting a dog, damage one of the tyres which needs to be replaced and scrape the bodywork quite badly.
You have an excess of £750. When you return the car you find that the paintwork will cost £500 to redo. Since this amount is less that the maximum excess, you are responsible for it all. You are also responsible for the total cost of the type replacement because your CDW doesn’t cover them at all.
You could reduce the risks of incurring expense of this nature by buying some excess insurance and your car hire company will typically be only too happy to sell you some.
Their rental car excess insurance may prove to be expensive when compared to other options and there is no obligation to buy this type of cover from them - which is where the independent specialist providers of rental car insurance come in.
If you have a look at the Internet sites of these specialists, you will find that they offer a wide range of rental car excess insurance products, which offer several features including cover for families and for seniors.
In addition, you may find that their excess insurance will also cover the excluded items at no extra cost. So in our example above the replacement tyre would be covered as well.
A further feature of excess insurance bought from these specialists is that they can provide annual cover. This means that your policy, valid for a year, can be used for any number of rentals you choose. You may only be able to rent one car at a time (up to a specified number of days at a time) and you may not be able to rent certain types of vehicle. (Motor homes, motorbikes, commercial vehicles, very high value cars, sport or vintage models may not be covered.)
Particularly if you are a regular renter, you may end up saving some money, depending of your circumstances.
It works quite simply. If you do have an accident, the car hire company may still charge any excess or charges relating to damage to ‘excluded’ car parts for which you are responsible, to your credit card. All you would have to do then would be to claim on your rental car excess insurance policy for reimbursement.
When you are arranging the insurance for your rental car it may be worth thinking about taking out rental car excess insurance.
This is because with the basic car rental insurance deals available through the car rental companies you are not completely covered and may still be liable for some costs should you be unfortunate enough to be involved in an accident or suffer some damage to the rental car.
Collision damage waiver is the basic insurance providing cover for damage to the rental car. With this type of policy you will still be liable for damage to any areas of the car excluded from the policy cover. These exclusions are likely to include damage to the windscreen, tyres, roof or undercarriage. You may also have to pay excess.
The policy excess is the portion of costs of the damage that you are liable to pay even if you have insurance in place. If the actual costs are less than the excess you pay the actual costs. If they are more you pay the excess amount and the insurance policy covers the rest. So if the policy has 750 pounds excess and the claim for damage totals 1000 pounds, it is you that will need to pay the first 750 pounds of the total of 1000 pounds.
Third party is the basic insurance which covers you for injury to another person or damage to their vehicle or property. Although by law in the UK this means unlimited liability for rental cars, there can still be an excess. So there’s no upper limit for payment on the policy but there may be a lower limit.
Given that excesses can be as much as 1500 pounds you could be liable to pay a substantial amount should you be involved in an incident.
Rental car excess insurance can provide cover against these costs. It can totally remove excess responsibility or at least reduce it.
The car rental company will probably offer to sell you this type of top-up insurance when you pick up the car. They will quote the price as a daily rate and when multiplied by the number of days you are renting the car for, this can end up being a substantial amount.
You may feel that you have no choice but to accept their policy and if you are standing at their rental desk waiting for the keys to the car this may indeed be the case.
If you are prepared to think a little bit ahead, you do have a choice and you may find that it makes sound financial sense to shop around just in the same way as you may have done to find the rental car in the first place.
There are independent insurance providers who specialise in rental car excess insurance. They will have policies to cover rentals in most parts of the world and the requirements of most renters.
They will also be able to offer an annual excess policy which you would be able to use for car rental throughout the 12-month period and you may be surprised at how cost effective this could be if you plan to rent more that once in any one year. They have daily rates as well, which may also be substantially cheaper than the equivalent cover offered by the car rental companies.
As long as you don’t want to rent a sports, vintage or very high value car (check the terms and conditions for specifics) they should be able to meet your rental car excess insurance needs.
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.
Renting a car has never been easier, once you understand all the terminology surrounding insurance. Each car rental company seems to have its own terms to describe their insurance cover. The most commonly used terms are Collision Damage Waiver / Loss Damage Waiver (CDW/ LDW), Supplemental Liability Insurance (SLI), Excess, Rental Car Excess Insurance, Excess Waiver, the Deductible and so on.
Essentially it’s similar in part to the private motor insurance you would take out for your own car. CDW and LDW are terms used interchangeably and together with theft, they cover you against the risks to the rented car through theft or damage caused in an accident. Although CDW will cover damage to the vehicle or its theft, it typically will not cover the theft of the vehicle’s contents.
If you are concerned about the contents of the vehicle, there are insurance policies that will cover this. It is also important to remember that many CDW policies will carry conditions that may exclude cover for damage to the roof, undercarriage, tyres windows or windscreen of the car.
All UK car rental companies must include by law unlimited Third Party cover as a mandatory part of the agreement. In other countries though the third-party cover may be ‘capped’ at a maximum payout level that may be far too low given the risks of high court awards following an accident. SLI is a form of insurance by which this third party insurance can be topped up. SLI is most commonly associated with USA rentals where insurance is optional but where litigation or damage awards may be amongst the highest in the world.
In common with most insurance policies, car rental insurance policies carry excess. The excess is the maximum amount that the renter has to contribute towards the cost of the damage before the insurance company will contribute. So if there is an excess of 600 pounds sterling and the damage amounts to 500 then the renter will have to pay the 500. If the damage on the other had amounts to 750 then the renter will pay 600 and the insurance company will pay 150. Excess levels on policies can range from 500 to as much as 1500 pounds.
Rental car excess insurance provides the renter with cover that pays the excess. For a premium the renter is then protected from incurring potentially very heavy costs in the event of a claim.
All types of car insurance can be purchased directly from the car rental company. These policies are valid only for the duration of the rental. There are alternative sources however that may well be worth considering if you are looking for the most competitive and broadest cover. There are numerous specialist insurance companies and brokers that offer online rental car excess insurance of this type. These companies can offer policies on a daily basis for the duration of the rental or on a longer- term basis such as 12 months. These long-term policies are policyholder as opposed to rental based and this provides cover for the policyholder every time they rent a car within the duration of the policy.
One particular benefit of buying from an independent insurance company is that their rental car excess insurance may cover items normally excluded from many policies. These exclusions include vulnerable and easily damaged parts of the car such as the windscreen, tyres, roof and undercarriage. Purchasing from these companies may give you increased peace of mind at a preferential price!