What is it likely to take to give you confidence and peace of mind about your car rental insurance? The chances are that you’ll want it to offer full financial protection and compensation for any damage, theft or loss throughout the period of hire. If your hired vehicle is stolen, vandalised, involved in an accident, or suffers any kind of damage, you might reasonably expect that the insurance you’re likely to have bought from the rental company will pay to put things right.

Few of us are likely to take the time to probe the small print and discover just what the car rental company’s insurance cover provides – especially if we’re hiring the car abroad, with a contract in a foreign language. Unfortunately, however, the car rental insurance that comes as a standard component of the advertised rate will typically offer financial protection that is significantly restricted by the following:

• a fairly steep excess (typically at least several hundreds of pounds and not uncommonly over a thousand pounds). If the vehicle is a write-off after a serious accident or is stolen and not recovered, therefore, you could end up having to pay the whole amount of the excess; and
• exclusions to loss or damage to certain areas of the vehicle (typically, damage to the windscreen or other glass, tyres, wheels, roof and underside of the car). In the event of any damage to parts of the vehicle excluded by the insurance cover, of course, you could be held liable for the cost of repairs.

You could avoid these potential shortcomings in the rental company’s standard package and restore your confidence in the full protection of car rental insurance by buying separate excess insurance (which in some cases may cover those parts of the vehicle excluded in the rental company’s cover) from an independent specialist insurance provider.

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.

There are two main components of car rental insurance. One is CDW or collision damage waiver and the other is third party cover.

Damage to the rental car

If you were to hire a car without any insurance cover at all then the car hire company would understandably hold you responsible for all costs relating to the repair of damage to the car or its replacement following its theft.

A collision damage waiver (CDW) removes this obligation from you though typically not completely. There tends to be a residual element, called the excess, which is the amount of money that you would still be expected to contribute to any claim.

In addition to this, some parts of the car, like the windscreen or tyres, maybe excluded from the CDW.

If is possible to buy some top up or excess insurance to remove or at least reduce what you may be asked to contribute.

Third parties

The second component of car insurance is third party cover, which protects you financially if someone sues you as a result of you injuring them or damaging their property with the hire car.

In the UK and many parts of Europe this cover is unlimited, which means that it would automatically cover all damages awarded by a court.

This is not the case in every country though and it may be advisable in these cases to increase your levels of third party cover by buying some supplemental liability insurance or SLI.

Contrary to what you may believe, you do not have to buy your top up or SLI cover from the car company.

There are independent specialists who may be offering car rental insurance at rather more cost-effective prices than those of the car hire company.

Car rental insurance may often be in place when you pay to hire a car either here or abroad. The policy typically protects against the possibility of you damaging the car due to an accident, damaging the property of a third party, or injuring someone. While you do have some element of protection in place, you have to consider how much excess you would be asked to pay towards a claim, if you have to make one.

The cost of repairing a car might add up to hundreds or even thousands of pounds. Of course you are not expected to pay all of this money, just the excess. However, even the excess may be a lot (from £400 right up to and possibly even more than £1,500), and this sum is usually taken directly from your credit card. If you wish to protect the amount of excess that you have to find, or part of it, then you may choose to take out rental car excess insurance.

Car rental insurance and excess insurance co-exist and may be a financial lifeline in the event of an accident. You usually still have to pay the excess on your credit card, but the good news is that you may claim it back on your excess insurance policy. Why run the risk of being in debt by a large sum, when you are able to cover possibly some or all of the excess?

When you rent a vehicle the car often comes with insurance from the rental company so you have nothing to worry about in the event that you suffer an accident in the car and it is damaged, or stolen – right? Actually this may not be so unless you had given some thought to taking out car hire excess insurance too.

Excess insurance for the rental car
You may not realise but the rental car insurance comes with a certain amount of excess. This is a sum of money that you have to find in the event of making a claim. This can sometimes be a large sum of money and it is typically charged to the credit card that you used when you hired the car. Therefore while the car rental insurance policy pays towards the cost of the damages to the car, so do you.

This amount will vary among providers but could range from £400 right up to and maybe even over £1,500!

Excess car hire insurance is an additional rental car insurance policy you are able to take to ensure that the excess is protected. As this may be a substantial amount of money, it may make sense to take out additional protection for what can be a comparatively small fee. If considering this type of insurance, the good news is that you may choose who to take the insurance with and an independent provider may offer a cost-effective way of getting hire car excess cover.