Considerations of car hire cover

In many countries of the world, some form of insurance is legally required before a motor vehicle can be driven on a public road. This applies also to hired vehicles, so if you are planning to rent a vehicle then you will need some form of car hire cover.

The car rental company usually provides car hire cover, to one extent or another though the type of cover provided and cost should usually be checked carefully in advance.

That’s because the cover will vary between companies and countries. Some companies in some countries will include in the price a very basic form of insurance called ‘Third Party’. This means that any damage you cause with the vehicle to third parties or their property will be covered. In other cases cover for risks to the hired vehicle such as theft may also supplement this type of car hire cover. Even here though, damage to the rented vehicle in an accident would still not be covered and the renter would be expected to pay.

Some companies will include in the price something called collision damage waiver (CDW). This basically means that many types of damage to the rented vehicle itself would also be covered by insurance – something that would offer peace of mind to most renters.

If your car rental company offer only one of the more limited types of insurance ‘in the price’, you may find that by paying extra you can top-up the insurance to include things such as CDW.

This isn’t quite the end of the story though, and there are two other things that should be thought about when looking for car hire cover.

It’s worth remembering to check what’s called the policy excess. Whether something like CDW is included in the rental price or not, you may find that you will be expected to pay an excess in the event of an accident – that is the ‘first part’ of the cost of any damage or claims. Sometimes the excess on the policy can be high and perhaps as much as 500-1500pounds sterling.

The second thing is whether or not the CDW cover contains exclusions. Some areas of a vehicle are easily and frequently damaged, including things such as tyres, wheels, windows and roofs. Many of these areas are frequently excluded from a car rental company’s CDW cover and the renter will need to pay if they are damaged.

An alternative way to obtain car hire cover is through a specialist insurance company or broker. These suppliers offer policies to a person/policyholder rather than a given car rental situation so this means that all vehicles rented by the policyholder during the life of the policy will be covered and this can offer significant pricing advantages. Typically these types of policy also offer wider cover including things such as those areas of the vehicle excluded from car rental company policies and improved excess cover.

Car hire cover insurance policies taken out with a specialist insurance company can usually be taken-out online. It may be an option that is worth exploring if you’re looking for the best deal possible and the widest cover.