Car Hire Excess Insurance - Car Rental Excess Insurance
Protect yourself against paying the excess if you have a scrape in your hire car abroad with car rental excess insurance. Car rental insurance covers your rental car excess payment - which could cost up hundreds of pounds - when you take out a hire car.
Archive for the ‘Rental Car Hire Insurance’ Category
Excess car hire insurance guide
Excess car hire insurance sounds rather complicated but in fact is relatively straightforward.
The origin of the ‘excess’
The ‘excess’ is a common insurance technique used by insurance companies to help keep the cost of the insurance (the premium) a little lower to you the client.
It means essentially that if you take the car rental company’s ‘basic’ insurance, you also agree to pay the ‘first-part’ of any subsequent claim to the limit specified by the excess.
That’s a bit of a mouthful and it’s perhaps more easily explained with an example.
The excess on your car hire insurance policy is set at say 750 pounds (and it is typically between 500 and 1500 pounds). You subsequently have an accident resulting in a claim for 2000 pounds. The rental company will debit your credit card for 750 pounds as ‘the excess and first part’ of the claim. They will then recover the remaining balance of 1250 pounds from their insurance company.
Had the claim totalled say 500 pounds, you would have had to pay it all even though you had insurance in place.
The excess is frequently controversial and is disliked by many car hire clients, particularly as you may have no control over who assesses any damage involved in an accident or who repairs it and at what cost.
Options to avoid the risks of excess
The car rental companies will reduce the excess or remove it entirely – for an extra cost. This they may refer to as ‘top-up’ insurance, ‘excess car hire insurance’ or in some cases perhaps ‘super CDW cover’.
You may though wish to consider another and usually far cheaper option to deal with the risks of excess, but to explain this we’ll need to think a little about car hire insurance.
The nature of car rental insurance
Your car rental company may have rented the car to you and included some components of insurance in the deal. If they didn’t, they will probably try to sell it to you separately. Whatever the situation in your case, their basic cover will usually include hefty excess.
You are though under no obligation to take the insurance they included in the deal or offered you for sale (with some exceptions such as some fly-drive holidays and perhaps some special offers). Even if it is already included, you can ask for a rental-only price and then purchase and use your own versions of car rental insurance.
On the Internet you will find a very active and competitive Insurance market including the specialist providers of various forms of car rental insurance. Their prices are almost invariably far cheaper than those of the rental companies and they may well carry no excess at all. If they have no excess then clearly you don’t need to purchase additional excess car hire insurance – because you have no such risk!
The specialist providers and excess insurance
For whatever reason, you may have decided to accept the rental company’s insurance but remain worried about their excess. The good news is that you don’t have to pay yet more money to them for excess insurance.
The specialist providers can also sell excess insurance that means they will reimburse you should you be charged excess by your rental company. Their excess car hire insurance typically will be much cheaper than that of the rental company and it can even be sold as an annual policy to cover you for any vehicles rented in the period (subject to some exclusions for very specialised vehicle types). It might be worth looking at in more detail.
Car rental insurance
Renting a car while on holiday or abroad for business can be one of the simplest and most straightforward ways of getting around – there’s no need to become confused over bus and train timetables and you can go virtually anywhere you want. However, hiring a car can come with its catches, not least in relation to the excess on the insurance policy. However there are some extra forms of car rental insurance which will protect against this excess, ensuring you are not stung with an unpleasant extra cost.
Normally when you hire a car in the likes of Europe, South Africa, New Zealand and Australia you’re provided with an insurance policy by the rental firm. This normally covers damage, third party liability and theft.
But you will also have to agree to an excess – an initial amount you have to pay towards the cost of any repairs or replacement before the insurance kicks in, in full.
This can be quite considerable and may be in the region of £200 or £300 all the way up to over £1000. As such car rental insurance often comes with something of a catch which means you could end up paying out hundreds of pounds or more for something which was not your fault.
Excess insurance is a voluntary kind of cover can be bought from independent online companies. Normally a policy will cover you for excess on damage to the vehicle, the excess on theft and on damage to windows, tyres and the undercarriage and roof.
The detail of this is important because some car hire companies will try to sell you excess insurance themselves, but this often excludes undercarriage damage and window and tyre damage.
Furthermore, it is possible to buy annual excess insurance policies which include unlimited use over the period of one year. To give an example, if you hired a car for 15 days in June, you can also hire another one later in the year and typically be fully covered without the need to buy an extra policy.
Common conditions include that no one rental is longer than around a month and it is usual to find that to be covered properly you have to rent the car a set distance from your home address – ie not rent a car close to where you live for the insurance to be active.
It is also usual to find that not only the policyholder is covered, but also any drivers named on the car’s rental agreement. There are a few other things to bear in mind if you are renting a car in places like America and Canada. Here it is common to find you do not get an insurance policy as standard but are offered the opportunity of purchasing one perhaps for a daily fee. Excesses are not charged in general but the person renting the car is often considered to be responsible for any damage to windows, tyres, the roof and the undercarriage.
Excess insurance works by either refunding the cost of excess which is taken straight off your credit card by the car rental company, or by simply paying the excess for you once you have shown your agreement for excess insurance to the car rental company, taking the headache of excess charges away from a car rental insurance deal.
Car rental insurance explained
Car rental insurance can be thought of as comprising three main subject headings:
- What risks are there to be covered?
- What cover is available?
- Where does the cover come from and how good is it?
The risks
When you’re driving a hired car, you are exposed to two main categories of risk:
- Claims from other people that you have damaged their property or injured them (or both) with the hire car. The costs here could be significant. If serious personal injury is involved a court could easily award 6 or even 7 figure damages against you. If your insurance doesn’t cover it then it will be you that has to pay.
- Claims from the car rental company that their vehicle has been damaged (or stolen) while being rented by you. As per above, if you don’t have insurance against such damage then you will have to pay from your own finances. This could in theory be as high as the cost of a replacement car.
The cover
The type of insurance that protects you against third party claims is unsurprisingly called Third-Party Liability Insurance.
The car rental insurance that protects you against claims for damage to the rented vehicle itself is called CDW – standing for Collision Damage Waiver.
Sources of the insurance
The car rental companies may or may not include some components of third-party and CDW in their rental price. It is difficult to be precise because practices vary between countries and rental companies. In those countries where they do not, they will usually be very eager to sell you third-party and CDW insurance separately.
You are under no obligation to take the insurance offered (or included) by the car rental companies. You can use your own and you may wish to consider doing so because it is usually very much cheaper and often provides better and more comprehensive cover. These types of policies can be purchased on the Internet from the specialist providers of car rental insurance.
Even if the rental company has included insurance ‘in the price’, you can still ask for a rental only price and then compare the figures for using your own insurance.
The cover of the specialists may be better because the basic third-party and CDW insurance of the rental companies may contain exclusions and limitations that the policies of the Internet specialist providers generally do not.
You may find for example, that the rental company’s third-party insurance has a maximum payout cap that is set too low. Their CDW may exclude several areas of their car from protection and it may also contain excess of 500 – 1500 pounds. The excess is the amount you would be expected to pay towards the costs of any claims.
The car rental company’s answer to this will be to try and persuade you to purchase extra ‘top-up’ insurance – but this may not be needed if you have your own insurance in place as the policies of the specialists may not contain such limitations.
Summary
No brief article can explain in detail the nature of car rental insurance but the sites of the specialist providers contain a wealth of information. Having a quick look could not only prove educational but it could be the first step towards saving you a lot of money.
Car hire excess insurance
Many people have signed a car hire agreement while quietly wincing at the excess which is attached to the insurance part of the contract. This can be anything from a couple of hundred pounds all the way up to more than a thousand depending on the country and the vehicle. In effect this means you will be liable for this initial cost if there is any damage regardless of whether or not it was your fault in most cases. However, there is a way to protect against this potentially irritating and costly expense – car hire excess insurance.
When you hire a vehicle in a number of countries including the UK, most of Europe, Africa, Australia and New Zealand and most of the middle and far east, collision damage waiver, theft and third party liability are often included in the rental car price. Fortunately there is pretty much always an excess which can sometimes be referred to as the non waiver or deductible – this is the potential cost which is protected by your car hire excess insurance policy.
What normally happens is that car rental company will take your credit card number upon signing car over to you – this is so they can simply remove the excess from your card in the event of a collision, theft or similar problem – but if you have excess insurance you can simply claim is back.
All you would have to do is call a helpline within a set time frame from the incident or on your return from your holiday, whichever happens sooner. You will be asked some basic information about your claim which will then processed, and subject to acceptance, you simply have the annoying excess fee refunded to you.
Although depending on where you’re going the excess can be referred to as the super CDW non waiver or deductible, they all refer to essentially the same thing which means a potential cost – this can be particularly infuriating if something happens which was not your fault, i.e. the badge is removed from the car in an act of vandalism overnight.
A car hire excess insurance policy covers most vehicles but may not protect certain types. Typically this includes recreational vehicles including off road vehicles, vans, trucks, motorcycles, and motor homes. Besides this, you’ll be protected provided you hire the vehicle for a reasonable distance away from your home address – normally at least 25 miles.
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. If not, they will certainly try their best to sell it to you as an optional extra.
You will probably find though that their insurance is several times more expensive 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 find their prices to be cheaper but also the cover they provide will probably be superior.
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 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 6 or even 7 figure sums, insurance is usually highly advisable.
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 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 1500 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.
Rental car insurance
Hiring a vehicle when you go abroad can be a cost effective way of getting around while on holiday. The costs on the continent are often pretty reasonable, with France and Spain being popular destinations for holiday makers looking to rent a car. But besides the initial costs there is always the hidden problem of an excess if you happen to have an accident. Thankfully there is the option of extra rental car insurance which protects the excess which can essentially take away the risk of any additional unwanted cost.
A rental car insurance policy covering the excess operates on a kind of payback basis, whereby the rental car hire company charges the excess on your credit card in the event of an accident. To get this back you can then simply claim on your car hire excess insurance policy.
It can be used whether you are in the UK or aboard.
The deal is normally taken out before you travel and can provide added peace of mind on top of any insurance policy agreed with the rental firm. While many people encounter a trouble-free holiday, because someone is driving abroad they may find negotiating the roads trickier. Likewise, as tourists they may potentially be a target for thieves who would break into a vehicle.
This kind of deal has become popular because there is pretty much always an excess on the collision damage waiver and theft aspect of the rental insurance. Excesses can be anything from around £400 all the way up to £1000 or even more. In the event of theft or damage to the vehicle, you would then have to pay this initial cost.
The extra car insurance with excess protection can save this potentially significant cost and reduce stress on your holiday. Normally the only requirement is that somebody is a full-time resident of the UK and is aged at least 21.
In many cases deals can be taken out in a wide range of countries, right across Europe and to the Americas and beyond. Many insurance companies will not provide protection for a limited number of locations, typically states with a significant level of extra risk, such as Afghanistan or Iraq.
While many people simply stick with the basic rental car insurance policy without really thinking about whether or not they might have to pay the excess, it can pay to sort out that extra independent protection before you go, potentially taking a significant sting out of your trip.
Top 5 rental hire car insurance saving tips
It’s possible that you’ve just won the lottery and no longer have to worry about saving money like the rest of us mere mortals. If you haven’t and would still be interested in some tips for saving money on rental hire car insurance, then here are our top 5.
1. Don’t assume that the rental company’s insurance is the best or cheapest around.
It is unlikely to be so. In general, the prices of rental hire car insurance are far cheaper on the Internet through the specialist providers of hire car insurance. They can often in fact be several times cheaper.
The cover may also be superior with privately purchased policies. That’s because the rental company’s basic insurance will probably exclude from cover damage to several areas of the rented vehicle and most likely it will also contain excess. The excess is an amount of money (usually 500-1500 pounds) that the rental company will demand you pay towards the costs of any claims even if you have their insurance.
In general, the policies provided by the Internet specialists will not contain such restrictions and limitations.
2. Don’t presume that you must take the insurance offered or provided by the rental company.
You are under no obligation to take insurance from the rental company that may in fact be far more expensive that that obtainable elsewhere. If the car rental comes with little or no insurance included then you are free to use your own policies.
If the insurance is pre-included in the rental price, you can still ask for a ‘hire-only’ rate and use your own very probably cheaper insurance again. This may not be possible in a limited number of special cases such as car rentals that are part of a fly-drive holiday or perhaps some one-off ‘special offer’ deals from the rental company.
3. If buying additional top-up insurance, it may pay to shop around.
If you have decided to take the rental company’s basic insurance, you may be uneasy about the gaps and limitations outlined above. They could cost you a lot of money following an accident.
The rental company’s solution will be to recommend you consider paying more to remove the excess and possibly cover the usually excluded areas of the rental vehicle. They may call this additional payment ‘top-up insurance’ or ‘SUPER CDW’.
This sort of additional cover can also be purchased over the Internet from the rental hire car insurance specialist providers. Once again it may be far cheaper than that offered by the rental companies. If you do have an accident you may still have to pay the excess to your rental company but you could then claim this back from your own private insurance policy.
4. If renting regularly, consider annual rental hire car insurance.
Paying for insurance on a rental-by-rental basis can be expensive if you hire more than once per annum. The specialist providers also sell annual policies that will cover any vehicle rented by you during the lifetime of the one policy (some specialist vehicles may be excluded). The cost savings could be very significant.
5. Don’t have accidents!
Not quite as much a joke as it may seem. If you have an accident then whatever the rental hire car insurance position, you could end up in serious personal, legal and financial trouble – and that assumes that no serious injuries have been involved. Remember you’re probably in an unfamiliar vehicle and if overseas, possibly driving in very different road conditions. Use prudence and take it easy!
Excess car hire insurance guide
Excess car hire insurance sounds rather complicated but in fact is relatively straightforward.
The origin of the ‘excess’
The ‘excess’ is a common insurance technique used by insurance companies to help keep the cost of the insurance (the premium) a little lower to you the client.
It means essentially that if you take the car rental company’s ‘basic’ insurance, you also agree to pay the ‘first-part’ of any subsequent claim to the limit specified by the excess.
That’s a bit of a mouthful and it’s perhaps more easily explained with an example.
The excess on your car hire insurance policy is set at say 750 pounds (and it is typically between 500 and 1500 pounds). You subsequently have an accident resulting in a claim for 2000 pounds. The rental company will debit your credit card for 750 pounds as ‘the excess and first part’ of the claim. They will then recover the remaining balance of 1250 pounds from their insurance company.
Had the claim totalled say 500 pounds, you would have had to pay it all even though you had insurance in place.
The excess is frequently controversial and is disliked by many car hire clients, particularly as you may have no control over who assesses any damage involved in an accident or who repairs it and at what cost.
Options to avoid the risks of excess
The car rental companies will reduce the excess or remove it entirely – for an extra cost. This they may refer to as ‘top-up’ insurance, ‘excess car hire insurance’ or in some cases perhaps ‘super CDW cover’.
You may though wish to consider another and usually far cheaper option to deal with the risks of excess, but to explain this we’ll need to think a little about car hire insurance.
The nature of car rental insurance
Your car rental company may have rented the car to you and included some components of insurance in the deal. If they didn’t, they will probably try to sell it to you separately. Whatever the situation in your case, their basic cover will usually include hefty excess.
You are though under no obligation to take the insurance they included in the deal or offered you for sale (with some exceptions such as some fly-drive holidays and perhaps some special offers). Even if it is already included, you can ask for a rental-only price and then purchase and use your own versions of car rental insurance.
On the Internet you will find a very active and competitive Insurance market including the specialist providers of various forms of car rental insurance. Their prices are almost invariably far cheaper than those of the rental companies and they may well carry no excess at all. If they have no excess then clearly you don’t need to purchase additional excess car hire insurance – because you have no such risk!
The specialist providers and excess insurance
For whatever reason, you may have decided to accept the rental company’s insurance but remain worried about their excess. The good news is that you don’t have to pay yet more money to them for excess insurance.
The specialist providers can also sell excess insurance that means they will reimburse you should you be charged excess by your rental company. Their excess car hire insurance typically will be much cheaper than that of the rental company and it can even be sold as an annual policy to cover you for any vehicles rented in the period (subject to some exclusions for very specialised vehicle types). It might be worth looking at in more detail.
Get a quote for Excess Car Hire Insurance from Insurance 4 Car Hire.
Car rental insurance explained
Car rental insurance can be thought of as comprising three main subject headings:
- What risks are there to be covered?
- What cover is available?
- Where does the cover come from and how good is it?
The risks
When you’re driving a hired car, you are exposed to two main categories of risk:
1. Claims from other people that you have damaged their property or injured them (or both) with the hire car. The costs here could be significant. If serious personal injury is involved a court could easily award 6 or even 7 figure damages against you. If your insurance doesn’t cover it then it will be you that has to pay.
2. Claims from the car rental company that their vehicle has been damaged (or stolen) while being rented by you. As per above, if you don’t have insurance against such damage then you will have to pay from your own finances. This could in theory be as high as the cost of a replacement car.
The cover
The type of insurance that protects you against third party claims is unsurprisingly called Third-Party Liability Insurance.
The car rental insurance that protects you against claims for damage to the rented vehicle itself is called CDW – standing for Collision Damage Waiver.
Sources of the insurance
The car rental companies may or may not include some components of third-party and CDW in their rental price. It is difficult to be precise because practices vary between countries and rental companies. In those countries where they do not, they will usually be very eager to sell you third-party and CDW insurance separately.
You are under no obligation to take the insurance offered (or included) by the car rental companies. You can use your own and you may wish to consider doing so because it is usually very much cheaper and often provides better and more comprehensive cover. These types of policies can be purchased on the Internet from the specialist providers of car rental insurance.
Even if the rental company has included insurance ‘in the price’, you can still ask for a rental only price and then compare the figures for using your own insurance.
The cover of the specialists may be better because the basic third-party and CDW insurance of the rental companies may contain exclusions and limitations that the policies of the Internet specialist providers generally do not.
You may find for example, that the rental company’s third-party insurance has a maximum payout cap that is set too low. Their CDW may exclude several areas of their car from protection and it may also contain excess of 500 – 1500 pounds. The excess is the amount you would be expected to pay towards the costs of any claims.
The car rental company’s answer to this will be to try and persuade you to purchase extra ‘top-up’ insurance – but this may not be needed if you have your own insurance in place as the policies of the specialists may not contain such limitations.
Summary
No brief article can explain in detail the nature of car rental insurance but the sites of the specialist providers contain a wealth of information. Having a quick look could not only prove educational but it could be the first step towards saving you a lot of money.
Get a quote for Car Rental Insurance from Insurance 4 Car Hire.
Top 5 rental hire car insurance saving tips
It’s possible that you’ve just won the lottery and no longer have to worry about saving money like the rest of us mere mortals. If you haven’t and would still be interested in some tips for saving money on rental hire car insurance, then here are our top 5.
1. Don’t assume that the rental company’s insurance is the best or cheapest around.
It is unlikely to be so. In general, the prices of rental hire car insurance are far cheaper on the Internet through the specialist providers of hire car insurance. They can often in fact be several times cheaper.
The cover may also be superior with privately purchased policies. That’s because the rental company’s basic insurance will probably exclude from cover damage to several areas of the rented vehicle and most likely it will also contain excess. The excess is an amount of money (usually 500-1500 pounds) that the rental company will demand you pay towards the costs of any claims even if you have their insurance.
In general, the policies provided by the Internet specialists will not contain such restrictions and limitations.
2. Don’t presume that you must take the insurance offered or provided by the rental company.
You are under no obligation to take insurance from the rental company that may in fact be far more expensive that that obtainable elsewhere. If the car rental comes with little or no insurance included then you are free to use your own policies.
If the insurance is pre-included in the rental price, you can still ask for a ‘hire-only’ rate and use your own very probably cheaper insurance again. This may not be possible in a limited number of special cases such as car rentals that are part of a fly-drive holiday or perhaps some one-off ‘special offer’ deals from the rental company.
3. If buying additional top-up insurance, it may pay to shop around.
If you have decided to take the rental company’s basic insurance, you may be uneasy about the gaps and limitations outlined above. They could cost you a lot of money following an accident.
The rental company’s solution will be to recommend you consider paying more to remove the excess and possibly cover the usually excluded areas of the rental vehicle. They may call this additional payment ‘top-up insurance’ or ‘SUPER CDW’.
This sort of additional cover can also be purchased over the Internet from the rental hire car insurance specialist providers. Once again it may be far cheaper than that offered by the rental companies. If you do have an accident you may still have to pay the excess to your rental company but you could then claim this back from your own private insurance policy.
4. If renting regularly, consider annual rental hire car insurance.
Paying for insurance on a rental-by-rental basis can be expensive if you hire more than once per annum. The specialist providers also sell annual policies that will cover any vehicle rented by you during the lifetime of the one policy (some specialist vehicles may be excluded). The cost savings could be very significant.
5. Don’t have accidents!
Not quite as much a joke as it may seem. If you have an accident then whatever the rental hire car insurance position, you could end up in serious personal, legal and financial trouble – and that assumes that no serious injuries have been involved. Remember you’re probably in an unfamiliar vehicle and if overseas, possibly driving in very different road conditions. Use prudence and take it easy!
Get a quote for Rental Hire Car Insurance from Insurance 4 Car Hire.