Car hire excess waiver and you

Most forms of car hire insurance policies that are provided by the car rental companies carry excess – that is the amount that the hirer has to pay before the car rental company’s insurance company will make any payment towards an insurance claim. This amount varies by company and policy but can be anything from 500 pounds to 1500pounds. Many insurance companies sell a car hire excess waiver policy that covers the hirer’s liability for any excess payments.

In simple terms if there is an excess of 750 pounds attached to the car rental company’s insurance, and there is subsequently damage to the car valued at 800 pounds, the hirer would normally have to pay (be liable for) 750 pounds and the rental company’s insurance policy 50 pounds. If the amount of damage were valued at less than 750 the hirer would have to pay the full value of the damage.

With car hire excess waiver, the hirer pays to waive (remove) the liability for paying the excess and in the example above would be liable for (have to pay) nothing.

The example above is simplistic and there lay well be other factors which should be taken into account.

It is normal practice for car rental companies to exclude certain items from their insurance policies. It could well be that even if the hirer takes out insurance against damage to the hire car as a result of a collision or an accident (Collision Damage Waiver or CDW), they may still be liable to pay for any damage to the windscreen, roof, tyres or undercarriage of the vehicle. This is because most but not all, car rental insurers specifically exclude these items from the cover that they provide within the terms of their policies. So going back to the example above if these items were excluded from both the CDW policy and the car hire excess waiver then the hirer would still have to pay for any damage to these items.

It may then be well worth the effort of looking around the insurance market place to find a company whose policies cover these items as standard.

Car hire excess waiver policies can be purchased from the car hire company at a daily rate for the duration of the rental. They are also available from independent insurance companies and can be purchased for longer timescales.

When bought in this manner the policies are linked to the policy owner and not to a specific rental vehicle so that they can obviously be used for a number of rentals within the duration of the policy. They may prove to be a more cost effective answer particularly if they also include those all-important tyres, windscreen, roof and undercarriage. All the hirer then has to do is to say no to the car hire excess waiver offered by the car hire company. Thereafter in the event of damage and a claim being required, the car hire company will charge the excess to the hirer’s credit card and the hirer claim on their car hire excess waiver policy and will be reimbursed directly by the insurance company.