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.Selecting the "get a quote" button will direct you to Insurance 4 Car Hire.
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Car hire insurance and its “hidden” cost
Have you ever been struck by the “hidden” cost of car hire insurance? To be fair, it’s perhaps not so much a hidden cost as one that you discover only when you arrive at the car rental check-out desk. It happens when the agent advises you that the insurance excess on the basic rental agreement runs into several hundreds of pounds – but that you can cover such a liability by purchasing
This could leave you with a difficult choice:
- either you decline the rental company’s excess insurance and risk having to pay the full amount of the excess (depending on the company and whether you are hiring at home or abroad, the standard excess could range from anything from £500 to £1,600); or
- you fork out for the company’s excess insurance, which is likely to be calculated on a daily rate and could well add hundreds of pounds to your total car hire insurance.
However, there is a way to avoid either of these unwelcome, hidden costs. If you purchase excess insurance cover from an independent provider (many of whom sell such policies online), you can rest assured in the knowledge that any excess is fully covered for the duration of your rental period, you will not need to purchase the rental company’s excess insurance, and you could also find that you are paying considerably less for the cover.
Tackling your excess car hire insurance this way could also help to indemnify you against damage to those parts of the typically excluded from the rental company’s standard cover (windscreens, wheels, underside and roof of the vehicle, for example).
When it may pay to have SLI insurance
If you are renting a car for use in the UK then you typically do not have to think about SLI insurance at all.
SLI (Supplemental Liability Insurance) may be best thought of as a top-up for third party liability cover.
Third party cover is what protects you financially in the event that someone sues you, claiming damages for personal injury or damage to their property, caused by you and the rental vehicle.
By law in the UK, all car rentals have to have unlimited third party liability cover. That means that no matter how big a court award against you may be, the third party insurance would cover the total amount. You personally would not be financially responsible for any part of the award.
In other countries, including the USA, third party cover may not form any part of the car rental agreement and if it does it may well be very limited.
What this means for you, as the renter of the vehicle, is that if you are in an accident and injure someone or damage their property, then that person may sue you for damages.
If the court award were more that the amount covered by your rental agreement third party insurance, then you would be personally responsible for any shortfall. Given the potential size of awards, particularly somewhere as litigious as the USA, this could represent financial ruin for you.
SLI insurance tops up the third party cover so that, while the amounts payable may still be limited, they may be more in keeping with potential court awards.
In those situations, such as in some USA rentals, where there may be no third party cover; SLI may become the primary rather than the supplemental form of protection.
You may, of course, be able to purchase SLI direct from the car hire company. It may also be on offer from independent car hire insurance specialists who also supply CDW cover and car hire excess insurance products.
You may find that SLI insurance bought from the specialists may be more cost effective and offer wider protection, than that available from the car rental companies.
What is CDW insurance cover?
When you hire a car, the insurance that provides you with financial protection against damage to the car itself (or its theft) is typically called collision damage waiver or CDW insurance.
Although it is not actually ‘insurance’ as such, for you, as the renter of a car, it provides much the same function.
Excess
In common with many types of insurance, CDW may typically carry an excess. This may vary by car hire company but tends to be in the range of £500-£1600.
What this means for you is that if the hire car is damaged, then you could be asked to contribute up to the excess value to the repair costs.
For example, with repair costs of £1000:
- a CDW excess of £750 would mean that your contribution would be £750;
- with a CDW excess of £1250, your contribution would be £1000.
Exclusions
With typical CDW insurance cover, you may find that there are certain parts of the vehicle which are simply excluded from cover.
These may include the windscreen, tyres, roof and undercarriage. Damage these during your rental and with only the basic CDW as supplied by the car company, you may find that you are expected to foot the full bill for any repairs.
Top up cover
Some people, not unreasonably, may decide that this is a significant amount of money to be paying towards the repairs on a rental car and may opt to take out some additional top- up or ‘super CDW’ cover to reduce or remove their exposure to repair costs related to either the excess or the excluded parts.
This can be purchased from the car hire company – often at the time you pick up the rental keys.
Another way
An alternative to this approach though, is to buy your car hire excess insurance prior to your rental from an independent car rental insurance specialist.
You may find that this is a more cost-effective option than using the car hire company and you may additionally find that cover for the excluded car parts are typically included at no extra charge.
If there is a problem with the car, the hire company may still charge your credit card with the costs attributable to you under your CDW insurance. You would then simply claim on your ‘top-up’ or excess cover for reimbursement.
Car rental excess insurance options
Whether you are renting a car for business or pleasure, making sure that you are aware of the options for car rental excess insurance may typically make sense.
Isn’t insurance included in the price?
Many car rentals these days do come with elements of insurance included in the price. The extent of this cover may depend on the legal requirements of the country concerned.
In the UK, in addition to unlimited third party cover, collision damage waiver (CDW) may offer some protection.
In the USA on the other hand, there may be little or no cover provided as standard.
Understanding the extent of cover provided is essential for peace of mind when driving in a strange car, in strange country and possibly on the wrong side of the road. It is, of course, possible to ‘top up’ the cover provided to a level you feel you are happy with.
Car rental excess insurance
CDW typically carries an excess. The excess is the amount of money, which your car rental company may expect you to contribute towards the cost of repairs to any damage that the car suffers while it is on rental to you.
Excess can represent a considerable amount of money, frequently in the range £500-£1600.
So, if your rental car is damaged and the repair costs are say £750, then if your excess is £1000 you’d have to cover all of the costs yourself. With an excess of £500, on the other hand, you’d contribute £500 and the rental company would pay the rest.
You can take out excess insurance to cover your potential exposure to these sorts of costs.
Where to buy?
Your car hire company will typically offer to sell you excess car insurance. They often do this at the time you pick up the car keys, by which time it is far too late to compare prices or even read through the policy detail.
Acting a bit in advance of your rental can give you the chance to compare the excess cover available from independent car hire specialists. You may also find that these car rental excess insurance policies offer protection for damage to parts of the car (tyres, windscreen, undercarriage etc) frequently excluded from typical CDW cover.
Daily Mail reports on holiday hire car rip off charges
QUOTE: It is absolutely vital to double-check the terms and conditions before you go.
If you’re planning on travelling long distances on your holiday, check the booking has unlimited mileage, which means you can drive as much as you like without penalty.
Most car hire policies will include cover for damage to the car — called collision damage waiver — and theft as standard.
But car hire companies are relying on drivers who don’t know what they are signing up for, so it helps to understand the jargon.
To begin with you have to know what you’ll pay if you have an accident. Although you have insurance you will still have to pay for the first part of any claim —called the excess.
To begin with you have to know what you’ll pay if you have an accident. Although you have insurance you will still have to pay for the first part of any claim —called the excess.
The average is around £600 but can be as high as £1,000. You pay if the car is damaged in any way — whether it’s a head-on smash, or a tiny scratch. It sounds like a lot, and car hire companies know this.
Then you need to know exactly what is and isn’t included under your car hire insurance. For example, your rental car insurance probably does not cover damage to the wheels, tyres or undercarriage of the vehicle — a chipped windscreen or puncture can end up costing you hundreds of pounds.
Read more: Daily Mail July 2011
Why you may need car excess insurance
When you rent a car, you may typically find that there are elements of rental insurance included in the price of your deal. You may also find, however, that you may still be responsible for the excess on the policy. Since this could be as much as £1600, topping up your cover with car excess insurance may typically make sense.
CDW and excess
CDW or collision damage waiver is the term used to describe the protection you have against being held financially responsible for the costs of repairing damage to the rental vehicle.
Typically, through CDW the car hire company waives or relinquishes their right to charge you for the loss of their car, through theft etc or for damage to it. Except, that typically they do not give up all of their rights.
They still reserve the right to charge you the excess or first part of any claim. The actual value of the excess may vary but you may find that it may be in the range £500-£1600.
That is quite a sum of money to be asked to contribute to the repair of someone else’s car and you may, quite understandably, wish to take steps to avoid this happening. This is where car hire excess insurance comes in.
With this type of top up cover, it would be the policy that paid out rather than you. Car hire companies are typically more than happy to sell you this additional protection.
CDW and exclusions
You may find though, that there are alternative sources for car excess insurance that may offer both better value for money and additional benefits.
CDW policies may typically exclude certain parts of the car, typically the windscreen, tyres, roof and undercarriage from cover. So you may find yourself responsible for repairs to these parts irrespective of the level of excess top up cover that you have.
With car hire excess sourced from on of the independent specialists however, you may find that these car parts are included as standard.
With an independent policy, in the event of damage to the car which resulted in you being responsible for the excess, the car hire company would typically still charge this to your credit card.
You would then simply claim on your car excess insurance for reimbursement.
Cost-effective car rental insurance options
If you rent cars on a regular basis, you may be all too aware that, once you add in additional car rental insurance costs, your final bill may bear very little resemblance to the attractive ‘all-inclusive’ rental price that caught your eye in the first place.
Buying your excess or ‘top-up’ cover from the car hire company, may add significant additional cost.
That may partly be due to the fact that, if you wait until the last moment to buy excess cover (typically just as you are picking up the keys) then with no real competition, the car hire companies can charge pretty much what they want.
There is an alternative though:
- there are a number of specialist car hire insurance providers who operate on the internet;
- they may be able to offer you the additional cover you may need at prices which may be more cost-effective than those on offer from the car hire companies;
- you organise your car excess insurance with them in advance, so you have plenty of time to shop around;
- the car hire insurance policies sourced in this way cover the driver rather than the vehicle and one policy may cover all named drivers on your rental agreement.
Another interesting feature of car hire insurance sourced in this way is that it may be available on a daily or an annual basis. That may be an attractive and time saving option if you rent regularly in the course of a year.
Once your car rental insurance is in place, your rental would then go ahead as normal. If any excess charges were due to be paid by you, these would still be charged to your credit card by the car rental company. These costs would then be reimbursed following a simple claim on your top-up insurance cover.
The peace of mind that excess cover may bring, might be significant – especially when you consider that the excess on some car hire insurance policies may be anywhere between £500 and £1600.
Excess car rental insurance sourced independently may also cover those parts of the car, like the windscreen and the tyres, which may be excluded by standard CDW.
Understanding vehicle rental insurance
The vehicle rental insurance that comes ‘as standard’ and which is often included as part of the rental deal, may be enough to allow you to get into the car and legally drive away.
The level of cover typically supplied with your rental may be the minimum legally required for the country you are driving in. Different countries have different requirements.
So while you may not be breaking the law, you may still wish to consider whether or not this level of cover gives you the peace of mind that you’d prefer to have, especially while driving a car you may not be familiar with on roads that you do not know.
For UK rentals, there are two main areas where you may find that the supplied vehicle rental insurance may leave you potentially facing significant costs in the event that you damage the rental car.
That’s because the collision damage waiver (CDW) that covers damage to, or the loss or theft of the car, may exclude certain parts of the vehicle from cover. So if you damage the tyres or the windscreen, for example, paying for the repairs may be your responsibility.
If you add to this the fact that there may also be an excess of anything between £500 and £1600, then you may be facing a serious charge to your credit card.
Car rental excess or ‘top-up’ insurance may provide the answer.
If anything happens to the car, a claim is made on the policy to cover the costs. When bought from the car hire company, however, this type of cover may not be the most cost-effective available.
There may be more cost-effective alternatives in the independent car hire insurance market place.
It works simply enough:
- you arrange your rental insurance excess policy with an independent online provider before your rental commences;
- these providers can do this because they insure the driver rather than the vehicle;
- all named drivers on your rental agreement may be covered;
- if you do have a problem with your rental, then you may find that the excess would still be charged to your credit card. With excess insurance sourced independently, however, you would then simply claim on your excess vehicle rental insurance policy for reimbursement.
Why you may wish to top up your car insurance for car hire
Many car rental agreements these days come with insurance included as part of the deal. Topping up this car insurance for car hire peace of mind, might be something that you wish to consider.
Car insurance for car hire is similar to the cover that you may need for your own car.
There’s:
- third party cover – to assist you financially if you are sued by someone claiming that you injured them or damaged their property with the rental car;
- collision damage waiver (CDW) – which protects you from the financial effects of needing to repair or even replace the hire car.
So, just what aspects of this cover may leave a bit to be desired and justify additional or top-up cover?
For rental in the UK, the main areas you may wish to consider are the excess and the exclusions.
Excess
Excess is a device used by many forms of insurance and it represents an amount of money that you will pay towards the cost of any future claim.
For example, if repairs to your rental car are to cost £500 and there is an excess on your hire insurance of £750, then you would be charged £500. If the excess were £300, then you would pay £300.
Since you may find that a typical excess on a car hire policy may be anywhere between £500 and £1600, taking out car excess insurance may make sense.
Exclusions
In a typical CDW policy, you may find that the windscreen, tyres, roof and undercarriage are not included in the cover. If these parts are damaged then it would your credit card that would be funding the repair or replacement.
If paying out significant sums of money for the repair of someone else’s car is something that you’d hope to avoid, then you can do this by topping up the standard CDW with car excess cover.
Buying this type of cover from the car hire company is obviously an option but you may find that this may not be the most cost effective way of securing this all important peace of mind.
There are independent providers of car insurance for car hire who may be able to offer more competitive prices. Their policies may also typically cover those parts excluded by other policies at no extra cost.
Your car hire insurance options
Even if you don’t hire a car on a regular basis, you are probably aware that car hire insurance may typically be included in the rental deal you take out with the car hire company.
There are two main components of insurance cover for car rentals:
- third party liability – which covers claims for damage to someone else’s property or injury to their person;
- collision damage waiver (CDW) – which covers damage to the vehicle itself and may typically also include theft.
Depending on where you are going to be driving the car though, the car hire insurance included in the price may differ quite significantly in the level of cover it provides during your hire.
Country differences
In the UK and some other countries, the third party liability cover provided by the car hire companies is unlimited, which means that there is no limit on the damages that the cover will pay out – no matter how much a court may award.
If you are renting in some other countries and the USA is a prime example of this, you may find that there is no third party cover at all or that liability is limited, which means that there is an upper limit on what the policy will pay out.
In these situations, Supplemental Liability Insurance (SLI) may typically be a sensible idea if you want to avoid being personally responsible for any shortfall should there be a claim against you.
That may also be the situation with CDW, where the level of excess (which is the amount you will be asked to contribute to a claim) applied to the waiver may vary considerably.
Excess charges may be anywhere between £500-£1600 and with USA rentals you may find that there is no CDW supplied in your rental package at all, so you would be responsible for the full costs of a claim.
Car hire excess insurance can provide you with protection against having to contribute to a claim. The car hire companies will typically offer to sell you some of this ‘top-up’ insurance.
You are under no obligation to purchase car hire insurance from the car hire companies and you may find that top-up car hire insurance, sourced independently, may provide more suitable levels of cover at a more cost-effective price.