The thought of having an accident while driving a rented car would worry most people. Even if nobody is injured, the costs of repairs to the rented vehicle will be payable by you, the renter, unless you have in place a form of insurance called damage liability waiver.
Damage liability waiver (this may also be called CDW for Collision Damage Waiver) is insurance that will pay for some types of damage to the rented vehicle. In some cases this form of insurance will be included in the basic rental cost of the vehicle or in others you may have to purchase it separately as an optional extra. This will vary by country and perhaps the rental company and you can check their rental agreements for details.
Although it is often tempting to save money by economising on insurance, it is worth keeping in mind that if you do not have this in place you will have to pay for all repair costs to the vehicle if it is damaged in an accident. This could run to several thousands of pounds.
Unfortunately, having damage liability waiver in place isn’t quite the end of the story if you’re trying to protect yourself from such risks. That’s because the basic damage liability waiver insurance provided by the car rental company, either in the price or purchased separately, will have limitations. It will very likely not cover damage to certain parts of the car such as the wheels, tyres, roof, undercarriage and windows. These are all areas typically damaged in minor accidents and they can be expensive to repair.
The policy will also probably carry excess. The excess is stated to be a financial amount that the car rental company will expect you to pay as the ‘first part’ of any claim. It is usually set at a figure between 500-1500 pounds. If it is stated to be 750 pounds and you have an accident that causes 1000 pounds of damage to the car, you will have to pay the 750 pounds excess. If the total cost is 400 pounds, you will have to pay it all.
If you are unhappy with these two limitations, you will probably have the option to purchase additional ‘top-up’ insurance from the rental company. This could reduce or eliminate the excess and possibly extend cover to excluded areas of the vehicle. It’s worth noting though that this type of insurance sold by the car rental companies is expensive – usually very much more so than similar insurance purchased directly online from an insurance company.
The direct insurance companies will sell damage liability waiver insurance that is not only cheaper but also more flexible. They are selling their policies to you as a policyholder and they can be taken out on a daily or annual basis. What this means is that the policy covers you not a given rental, so any car you hire during the life of the policy will be covered (there will be some exclusions for specialist vehicle types such as sports cars or very high value cars of over 100,000 pounds in value).
Purchasing damage liability waiver insurance from a direct insurance company could save you a lot of money and improve your level of protection – it may be worth thinking about!
Tags: Damage Liability Waiver