Car rental insurance explained

If you are renting a car then you are also very possibly trying to work out how to get the best car rental insurance policy. This can be done entirely through the car rental company although the terminology can seem confusing and sometimes the ‘top up’ insurance costs can start to seem high.

The car rental insurance that comes included in the car rental price will in most countries usually include cover against damages to third parties. It may also include some types of damage or loss risks to the rented vehicle itself such as theft.

It’s also possible that your rental price will include something called collision damage waiver or CDW for short. This is a type of insurance that protects you and your rental car against damage. If you do not have this and the rental car is damaged in an accident then you may find that you have to pay for the repair costs. If the CDW is not included in the basic cost then most car rental companies will add it in for an additional cost.

It may also be a good idea to examine the car rental insurance provided by the rental company in a little more detail. Firstly, is the liability cover provided to cope with third-party claims actually offering sufficient protection? Typically the amount covered is limited and (e.g.) court awards in the event of personal injury can be high. Secondly are areas of the hired vehicle such as the wheels, tyres, roof and windows, excluded from insurance cover? Quite often they are and repair costs in these areas can be expensive. Finally, does the policy carry an excess, and if so, how much? The excess is the amount you will be expected to pay as the ‘first part’ of any claim. Excess figures of 500-1500pounds sterling are not unusual on some car rental company policies.

In all the above cases, it is worth remembering that it is you as the renter who will have to make good any ‘gaps’ in cover following an accident. In some cases the amounts covered can be increased, and excess reduced, by paying the car hire company additional amounts to ‘top-up’ the insurance cover.

An alternative is to seek car rental insurance through a specialist insurance broker or company, and ‘no’, you are not obliged to take the rental company’s insurance!

Specialist insurers frequently offer their car rental insurance products online. Their policies are significantly different to those of the car rental companies as they are sold to you as a policyholder. As a result, they will cover you for any car hired during the life of the policy. They also typically include many items of cover excluded by the car hire companies such as damage to wheels etc. You may also find that they carry less or no excess and will offer increased third party or ‘personal liability’ insurance.

All in all, car rental insurance taken out through a specialist car hire insurance company may offer numerous advantages and cost savings. It is certainly worth checking out and researching through the Internet.