Annual car hire excess insurance

Annual car hire excess insurance is an insurance policy which you buy separately to the basic car hire insurance. It is usually purchased from a specialist insurance company or a car hire company.

 Most car rental agreements carry some form of basic insurance included in the price. For the basic cost the hirer of the vehicle may find included some combination of third party, fire, theft and CDW (collision damage waiver) insurance that covers some forms of damage to the hired vehicle. 

The basic 'in the price' insurance will often contain what is called the excess. This is the amount of any claims or damage costs that the car rental company will expect the renter to pay directly in the event of an accident or similar trauma.  As an example, if the vehicle requires 1000's worth of repairs following an accident and there is a 500 excess, then the renter will need to pay the 500.

If an inPidual car renter is concerned at the extent of this exposure, they can choose to purchase annual car hire excess insurance. This is a type of policy aimed specifically at reducing or eliminating the risks of having to pay hefty excess amounts in the event of a problem arising.
When purchased from a car rental company this type of cover may mean that in the event of an accident the car rental company would not expect the renter to pay any excess. If purchased from a specialist insurance company, or from some car rental companies, the renter may still have to pay the excess to the car hire company but could claim this back from their annual car hire excess policy.

These are usually flexible multi use policies that provide insurance cover for the policy holder for one year. Typically the policy holder can rent a car as many times in the 12 month period as required and this may offer significant savings over paying for car insurance on a rental by rental basis.

The policy holder must be the person to hire the car but named drivers on the rental agreements may be covered automatically. As with any insurance policy, there may well be special conditions attached.  For example not all annual car hire excess insurance policies automatically cover named drivers above or below a specific age. Other such policies may exclude vehicles hired in specified countries or vehicles of certain types such as commercial. It may also be the case that vintage, specialist or very high value vehicles are often excluded from cover.

This type of policy should be checked for inclusions and exclusions. Those policies purchased from car hire companies may exclude damage to some areas of the vehicle such as the windows, the undercarriage, the tyres and the roof.  Many annual car hire excess policies sold by specialist insurers may include these areas under cover and offer additional cover in ancillary areas such as third party liability cover – this would need to be carefully checked.