Insurance for car rental

There are some wealthy people for whom the costs of car rental and the insurance for car rental are completely incidental. Much as they can be envied, in reality for the vast majority of car renters the price is very important!

Not only is the price a key factor also there is one’s peace of mind. Few people would enjoy driving somebody else’s car whilst worrying about whether their insurance is adequate or not.

So most renters want to know how they can be sure that their insurance for car rental is firstly adequate and secondly the best deal possible.

The start point is to examine the insurance that comes with the basic car rental price. In some countries this ‘in the price’ insurance may be quite limited or even non-existent.

It is possible that it will cover only third party liability, in other words the costs of anyone that suffers as a result of your driving the rental vehicle. If this is included, it is a good idea to check whether or not the maximum payout is capped at a realistic level (for the UK this is not an issue as cover is by law unlimited). Frequently the basic liability insurance payout maximum is set at a level way below the sums that say a court could award in an accident. It is important to understand that if there is a difference between the maximum insurance payout and an award, the renter will need to pay it!

Third party liability provides the renter with no protection at all against damage to the hired vehicle. If say a minor collision resulted in 2000pounds of damage to the rented vehicle, then the renter would need to pay that if no other insurance was in place.

Many hire companies do include additional insurance for car rental cover in their basic price. Typically this will include cover for issues such as theft and possibly basic CDW (collision damage waiver). Basic CDW provides the renter with insurance against some types of damage to the rented vehicle, but this cover can be restricted.

Typical basic CDW policies will exclude damage to several areas of the vehicle that are commonly and expensively damaged such as wheels, tyres, windows and roofs. The car rental company’s insurance policy may also carry excess. The excess is that amount that the renter would be expected to pay towards the costs of any claim following an accident – and the amounts usually range between 500-1500 pounds sterling.

The car rental companies will always be pleased to sell additional insurance to a renter to cover some of these risks or reduce excess etc. This is often called ‘top-up’ insurance and although it may offer additional peace of mind, it can prove expensive.

It may be possible to find a lower cost alternative for top-up insurance through the specialist insurance companies and brokers, many of who operate online.

There is no obligation to take the car rental company’s top-up insurance products and a renter is at liberty to shop around. It may be the case that insurance for car rental can be found more cheaply, and offering broader cover, through the specialist insurers. Quite often their policies will cover all areas of the rented vehicle and they can also cover any insurance excess that needs to be paid out to the car rental company following an accident. They usually will be able to offer extended personal liability insurance to help bridge gaps in the car hire company’s policy.

An added advantage of this type of insurance for car rental is that it is sold to a policyholder for a period of time and would cover all cars rented during the lifetime of the policy. The potential cost savings and convenience that this may give mean that it may well be worth checking out.