Insurance for hire cars

A form of insurance for hire cars usually comes as part of the rental price although this is not necessarily the case in all countries. It should be detailed on the quotation document that you see from the hire car company.

This insurance can be of several forms. In many cases it will cover you for third party liabilities (the damage you may cause to others), theft and perhaps what’s called collision damage waiver or CDW. CDW is a form of insurance that protects you against the costs of damage to the rented vehicle itself. Even when this is not included in the rental price, most car rental companies will offer it as a chargeable form of extra insurance.

It’s worth bearing in mind that the standard insurance for hire cars, even if it includes a form of CDW, may well leave you somewhat exposed.

That arises from three main factors. Firstly, the third part liability insurance may well be capped at a certain maximum level of payout (in the UK by law it is unlimited). It would be a good idea to remember that court awards to third parties in the event of an accident may be very high. If they are higher than your maximum cover available through the car rental company’s policy, then you will have to pay the difference yourself.

Secondly, your CDW insurance may exclude damage to several areas of the rental car that typically are amongst those very commonly damaged in minor accidents such as the roof, wheels, tyres, wheels and windows.

Thirdly and finally, it may be worth paying attention to the policy’s excess. The excess is the amount of money that you will be expected to pay towards the cost of any claim and damage repair costs. In man standard insurance for hire cars policies provided by the rental company, this could be anywhere between 500-1500pounds.

Many people renting a car may feel uncomfortable at some of these exposures, but the good news is that there are ways of reducing your risks.

It is usually possible to buy additional top-up insurance from the car hire company. This could reduce the excess payable in the event of an accident, increase the amount of personal liability insurance available and expand damage cover to other areas of the rented vehicle normally excluded. This may allow you to feel a little more relaxed, but the costs may also prove expensive when added together.

An alternative approach is to seek your insurance for hire cars from a specialist insurance company or insurance broker, most of whom offer policies that can be taken out online. Their policies and products will vary from excess insurance that will cover any excess you have to pay to the car hire company in the event of an accident, to more complex products that will provide additional personal liability cover, vehicle damage cover and excess insurance.

In some cases this could offer significant cost reductions over the policies offered by car rental companies. That’s because insurance for hire cars purchased from an insurance company or broker will be sold to you as a policyholder and for a given duration rather than just a single car rental agreement. This means that any vehicle hired by you in the lifetime of the policy will be fully covered – you do not need to take out insurance on a hire-by-hire basis. Many of these policies offer superior cover and pricing to those of the insurance companies and they may well be worth investigating if you’re looking for a good deal.