It can be a nasty shock if you are unfortunate enough to have some form of accident when driving a rental car. Unfortunately you may get another one if you find that following the accident, the car rental company has charged you for the accident even though you purchased insurance from them. To avoid the risks of this happening, it may be worthwhile purchasing car rental excess insurance.
To explain why this is so, it is necessary to consider the nature of most car rental insurance provided by the car rental companies.
Essentially their insurance will cover you and the rented vehicle against claims from third parties, theft of the vehicle and damage to it. This sort of cover is usually called liability, theft and CDW (Collision Damage Waiver) insurance. It may come included in the rental price or you may purchase each component of it separately from the rental company.
This type of insurance purchased from the car hire company is usually ‘basic’ in that it typically comes with certain limitations and exclusions. You may find that the maximum amount payable under third party liability is capped at a maximum level that is far too low given possible court awards following an accident. It is also common to find that the rental company’s insurance will exclude certain areas of the vehicle from its cover. These are usually the wheels, tyres, roof, windows and undercarriage. These are all areas that are commonly damaged even in minor accidents and they can be expensive to put right. If they are excluded from cover, it is you as the renter who will have to pay.
Finally, the policy as a whole may carry what’s called excess. This is an amount that it stipulated as being the sum you will have to pay as the ‘first part’ of any claim. This sum is usually set between 500 – 1500 pounds. So if there is an accident that damages the vehicle to a total of 900 pounds and the policy has an excess of 600 pounds, it is you that will have to find the 600 pounds. This is where some renters find they receive an unpleasant surprise when examining their credit card bills after even a small accident with a rented vehicle.
Fortunately it is possible to protect yourself against high excess charges by purchasing additional insurance to cover these risks. The car rental company will usually offer you what they often call ‘top-up’ insurance that will allow the excess amount to be reduced and possibly the liability cover to be increased and other areas of the vehicle covered. This insurance though is usually considerably more expensive than similar products available from the general insurance market.
It is possible to purchase car rental excess insurance online from insurance companies and brokers. These policies will reimburse you for any excess payments you are forced to make to the car rental company following an accident. They can be taken out on a daily or annual basis and are often very considerably lower cost than similar insurance from the rental company.
Car rental excess insurance from the direct insurance companies also usually offer other benefits and cover types. Some policies may offer enhanced liability cover (sometimes called supplemental liability insurance or SLI) that will increase the maximum payable. They also typically will cover areas of the rented vehicle frequently excluded by the rental company.
As their car rental excess insurance policies are sold to you rather than a given rental agreement, they can be used for multiple vehicles hired during the lifetime of the policy. This can offer significant flexibility and cost advantages, although you may have to avoid renting sports cars, specialist vehicles or those that are over 100,000 pounds in value as they will be excluded from cover. This option may be worth checking in detail if you’d like better cover at reasonable prices.