Beginners Guide to Rental Car Hire Insurance
If you’re not familiar with car rentals and rental car hire insurance, it can all seem a little bit confusing.
In general, the insurance industry LOVES acronyms and throws them around liberally such as CDW, SUPER CDW, TPF&T and so on. Fortunately, the reality is in fact fairly simple once the basics are understood. We’ll try here to de-jargonise some of all this for you through some basic questions and answers.
Who sells rental car hire insurance?
The rental car company may include some insurance components in the rental price, such as car hire excess insurance. If not, they will certainly try their best to sell it to you as an optional extra.
You may find that in some cases their insurance is less attractively priced than the same insurance purchased on the open insurance market through the internet. There are specialist providers of such insurance and not only will you often find their prices to be maybe more cost-efficient but also the cover they provide may offer attractive features and benefits.
Is insurance obligatory?
It depends what you mean. In most countries some form of minimum insurance is often a legal requirement. In others it may not be. Your hire company would advise you on that or you could research it on the web.
Remember that even if insurance isn’t a legal requirement in the country you’re renting in, driving without it could be very, VERY risky. If you do not have insurance and have an accident then you potentially could be held responsible for all costs involved and need to pay them out of your own finances. As the claims could go well into several figure sums, hire car excess insurance may be worth considering.
However, if you were wondering whether or not it is obligatory to take the rental company’s insurance, then the answer is ‘NO’.
Even if they have included insurance in their rental deal, you can ask them for a ‘rental only’ price and then compare that against using your own insurance purchased on the internet. You may be surprised at how much money you could save though you may not be able to do this if you’re renting through a fly-drive holiday or on a ‘special offer’ basis.
What do all these acronyms and ‘types of insurance’ actually mean?
The insurance on your rental car will probably break down into two main areas. The first of these is called Third-Party liability and protects you against claims from other people that you have injured them or damaged their property with the rental car. In many countries this is the legal minimum insurance you must drive with.
There is then something called ‘CDW’ which stands for collision damage waiver. It typically covers you against any damage caused to the rental car while it’s out on rental to you. This usually includes cover against theft but it’s worth checking to be sure.
How can privately purchased rental car hire insurance be ‘better’ than the rental company’s?
You may find that the basic insurance offered by the rental companies is limited. It may contain excess (an amount towards any claim that you’ll have to pay) of between 500 and 1600 pounds. It may also exclude several areas of the rented vehicle from its damage cover.
If you wish to avoid this, you will have to pay the rental company for extra insurance – often called ‘top-up or ‘SUPER CDW’.
The policies purchased from the specialist providers may not contain such exclusions and limitations.
Where can I find out more?
The web sites of the specialist providers usually contain excellent detail on these subjects and are aimed at people with no specialist knowledge of rental car hire insurance. They may be worth checking out.