If you rent cars regularly, then annual car hire excess insurance may be something worth considering as a way of saving what could be considerable amounts of money.
When renting cars, many people find that the car rental company’s insurance has within it something described as ‘excess’. This is usually stated as a financial amount – typically between 500 - 1500 pounds or the equivalent in local currency.
This means that if you were unlucky enough to suffer an accident that subsequently involves an insurance claim, the car rental company and their insurance company would expect you to pay the excess as the ‘first part’ of any claim settlement. In number terms, if the excess is stated to be 1000 pounds and an accident results in damage to the tune of 1500 pounds, then the car rental company will charge the 1000 pounds excess to your credit card. If the damage is valued at 750 pounds, the charge to your credit card will be for the full amount of 750 pounds.
Many renters find this level of financial exposure to be disconcerting and look to cover this with additional insurance. It is usually possible to purchase additional ‘top-up’ insurance from the car rental company but this may prove very expensive compared to similar products sold by direct insurance companies – usually online.
The direct insurance companies and brokers offer annual car hire excess insurance policies that are geared up to helping renters save money in these areas – particularly those who are renting cars regularly. Their policies can be purchased on an annual or daily basis and will provide cover for the excess that exists on many car rental insurance products. If a claim arises, the policyholder may still have to pay the excess to the car rental company but can then claim this back from their own insurance policy.
Annual car hire excess insurance may also provide additional cover. For example, many car rental policies will cover the renter for damage caused to the rental vehicle but exclude from this commonly damaged areas such as the wheels, roof, tyres and windows. Many annual car hire excess insurance policies will include cover for these items and reimburse you if you have to pay for damage to them.
It is also the case that the third party liability insurance that comes in the basic rental car insurance is often limited in terms of the maximum amount covered. The coverage may not be sufficient considering the very large awards that can be handed out by the courts. Many of the direct insurers will offer products and policies that can significantly increase the cover, and peace of mind, in this important area.
One of the major advantages of annual car hire excess insurance is that it is sold to you the policyholder for a specified period. As such, while the policy is in force and providing the basic conditions are met, it will cover all vehicles rented by the policyholder, with the exception of specialised vehicles such as sports cars or those that are of exceptionally high value – usually over 100,000 pounds. This could be both very convenient and economical and it may be worth investigating further.