Car hire excess

When thinking about hiring a car, you may see notes in the proposal from the car hire company relating to ‘car hire excess’. This is sometimes just called ‘excess’ or at other times ‘insurance excess’. They all mean much the same thing.

Should you be unfortunate enough to have an accident while driving the rented car, the car hire excess is the amount of any subsequent claim that you would be expected to pay yourself. This is also sometimes called ‘the first part’ of a claim.

It works quite simply. If for example the car hire company’s insurance policy carries an excess of say 500pounds, then if there was an accident and the vehicle suffered damage to the value of 1000pounds, you as the renter would be expected to pay the first 500pounds of that 1000pounds. If the damage total was 300pounds and the policy had the same excess of 500pounds, then you would have to pay that – in effect you would be paying the whole amount.

The excess on a policy will differ by each car hire company and sometimes by the standards and requirements of the country concerned. In general, an amount of somewhere between 500-1500pounds sterling would be the norm.

Although it is not really a policy excess as such, it may also be worth checking the amount of third party or personal liability cover that comes with the insurance and included ‘in the price’. Sometimes the maximum amount payable can be limited (though in the UK by law it is unlimited) and court awards in the event of an accident can be high. If there is a difference between the maximum payable under the policy and the amount awarded by say a court, then the difference will need to be paid by you the renter.

In both cases by paying extra to the car hire company the excess can usually be reduced and the amount of personal liability cover increased.

It lay also be worthwhile looking at car hire excess policies, and related car hire insurance, that is available online from specialist insurance companies and brokers. In some cases it may be possible to take out what’s called ‘excess insurance’ that means if you have to pay an excess to the car hire company following an accident, then you will be able to get this back from the insurance company. As part of the same product range you may also find that it is possible to increase the amount of personal liability cover you hold for a very modest sum – it could give you peace of mind!

Unlike the insurance that is provided by car hire companies, car hire excess and car insurance policies sold by the general insurance companies covers you the policyholder for the period of the policy and not a hired car alone. It will cover you for any vehicles hired during that period and this could offer very interesting price reductions against similar products sold by the rental companies.

It is always worth remembering that you are not obliged to take the additional insurance offered by a hire company. If you’d like to know more about car hire excess insurance then it is worth checking around and making a few enquiries. You could save money!