If you are unlucky enough to have a ‘bump’ in that rented car, you need to be prepared to start writing some very large cheques – unless of course you have taken out collision damage waiver insurance (sometimes called CDW).
Car rental insurance is quite easy to understand in its most important aspect – if you do not have all required forms of insurance and have an accident, then you and only you will be paying up. That’s why it is important to understand what insurance if any comes included in the basic rental price and those areas where it may be advisable to pay for some more.
Collision damage waiver insurance covers you against any damage to the rental car following an accident. The other major form of rental car insurance is third-party liability, which would cover you in the rented car should you injure someone or damage their property.
These forms of insurance may be included in the car rental price (as would commonly be the case in many European countries) or the rental company may offer them as optional extras (e.g. in the USA).
The collision damage waiver insurance sold, or included, by the rental companies is likely to be limited in several respects. You will probably find that it excludes from cover several easily damaged areas of the rented vehicle such as wheels, tyres, roof, undercarriage and windows. If these are damaged, you’ll have to pay for them. The policy also probably carries what’s called excess. This is an amount of money that you may have to pay as the first part of any claim – and it is usually set somewhere between 500 and 1500 pounds depending upon the individual rental company and country of operation. So if there is an accident resulting in 1500 pound’s worth of damage and there is 1000 pounds excess on the policy, then expect to see an additional 1000 pounds charged to your credit card by the rental company.
These limitations may give rise to the odd sleepless night! Fortunately there is an answer.
You can purchase ‘top-up’ insurance from the rental company. This may cover some of the normally excluded areas of the vehicle and it also may offer a reduction in the policy’s excess or perhaps reduce it altogether. Unfortunately such top-ups can be very expensive if purchased from the rental company.
If you’re looking for a better deal on collision damage waiver insurance, you may wish to check out the direct insurance providers that sell over the Internet. Their products are typically far cheaper than those of the rental companies. They offer a range of insurance for hire car policies including, as an example, one that will reimburse you should you have to pay the rental company excess or ‘uncovered areas’ costs following an accident. So even if some basic insurance is included in the rental price, you can purchase your ‘top-ups’ from the direct providers. It may be worth taking a few minutes to check out these options and companies on the Internet – you could save yourself a lot of money.