The technicalities of hiring a car are usually easy to understand, but understanding the various types of car hire cover insurance is sometimes a harder challenge.
That’s because most car rental companies have their own car hire cover policies that vary from one company to another and to make matters worse, the insurance can also vary depending upon what country you are hiring in.
In general, when hiring a car you will probably have two or three options in terms of finding cover.
Option 1 is to take the car hire cover insurance from the car rental company. This usually works on the basis that included ‘in the price’ are certain basic forms of insurance that may provide limited cover. The rental company will usually invite the renter to buy additional forms of insurance to cover other risks – this is often called top up insurance’.
Option 2 is to buy this ‘top-up’ insurance online from a specialist insurance company or insurance broker.
Why is it necessary to consider top-up car hire cover? The insurance that comes in the price may include only third party liability cover. This would mean that you would be insured for any damage you did to a third party or their property, but any damage caused to the hire vehicle itself would be paid for entirely by you. It’s also worth noting that while the third party liability cover is unlimited by law in the UK, in many other countries it will be capped to a maximum payout level that could be inadequate given the large amounts sometimes awarded by the courts in accident compensation.
Normally the car rental company will either offer at a cost, or include in the basic price, something called CDW (collision damage waiver). This offers some insurance protection against damage to the hired vehicle itself but the basic CDW is usually limited as it excludes damage to certain areas of the vehicle such as the roof, windows, tyres and wheels and it may also carry what’s called excess. The excess is that ‘first part’ amount of any claim that the renter would be expected to pay – typically between 500 and 1500pounds sterling.
If you the renter are uneasy about carrying these risks, then top-up insurance may be the answer as it can reduce the excess, increase the amount of third party liability cover and possibly extend cover to those areas of the vehicle normally ‘excluded’ by the basic cover.
Using the option 1 route above and buying this additional car hire cover insurance from the car rental company is often done almost by default as it is all in the one transaction with rental. This though can prove expensive and there is an alternative that may offer significant cost savings and more flexibility.
The car hire cover policies available from direct insurance companies are sold to you as the policyholder and for a given period (typically by the day or annually). This means they cover not just the one car rental but in fact any car you rent during that period. As such, they usually offer significant cost savings over the same policies purchased from the car rental company. As an option it may be worth considering if you are interested in saving money and obtaining better cover..
Tags: Car Hire Cover