What is excess waiver insurance?

Excess waiver insurance for car rentals- what is it and do you need it?

When you hire a car, the insurance cover that you will normally take out will be for Collision Damage Waiver (CDW) third party and theft. CDW and theft provide what can be thought of as being close to comprehensive insurance and covers damage to and loss or theft of the vehicle.

By law car hire companies in the UK are obliged to provide cover to protect the hirer against third party claims to an unlimited amount, but this is not necessarily the case in other countries where this cover may be included but only up to a certain limit. Supplemental Liability Insurance (SLI) policies can be taken out to raise this limit.

Most if not all of insurance polices will carry an excess which for car rental insurance is typically somewhere in the region of 500-1600 pounds. Excess is also known as the non-waiver or the deductible. What the excess means is that in the event of a claim on the policy you as the driver of the vehicle will be liable to pay the first part of any damages up to the value of the excess. So with an excess of 750 pounds and damage of 500 pounds you would have to pay 500. If the damage figure was 1750 pounds you would be liable for 750 pounds and the car rental company’s insurance would pay the remaining 1000. So you could be liable to pay out a hefty amount even though you think you are fully insured.

Excess waiver insurance is available as an optional extra form of insurance to provide cover for all or part of the excess. Many people find that the peace of mind this offers is well worth the additional cost of this insurance.

Excess waiver insurance can be bought direct from the car rental company either at the time of booking or when you pick up the keys, or from an independent insurance company. If you decline excess insurance from the car hire company and opt for an independent insurer then typically the car hire company will still charge any amount payable as a result of the excess to your credit card. You would then be able to claim this back from the insurance company up to the limit defined in your policy.

Going back to the examples above, if your excess waiver insurance gave you cover for up to 1500 pounds of damage then in the first example all of the 500 pounds would be covered. In the second example though you would only be covered up to 1500 pounds and you would still be liable for the remaining 250. However it may be possible to increase the level of cover to provide complete peace of mind.

CDW policies sold by the car rental companies at point of sale will normally specify that certain items are excluded from their cover and you would have to pay for any damage to these yourself. These are parts of the vehicle most likely to be damaged and are the tyres, the windscreen, the undercarriage and the roof. You will find though that while this is common practice by car rental companies, many independent insurance companies will in fact provide cover for these vulnerable items.