Daily car hire excess insurance

Daily car hire excess insurance is one of several forms of insurance that can apply to car rentals.

Most car rental companies will include some form of insurance as part of the rental package and this cover may or may not include third party, fire, theft and possibly some cover against damage to the car itself – this latter form often called CDW (collision damage waiver).  Prior to collecting the car the renter should examine carefully what is or is not included in the basic insurance cover so that they can decide whether or not additional insurance is required.

Where some of these insurance components are missing from the basic 'in the deal price' or are included but offer only limited cover,  then additional insurance may be offered to the renter by the car hire company as an optional extra involving an additional payment.

Even with these types of basic cover though, the renter may still be liable for the excess. The excess is the first portion of any costs relating to a claim on a policy and is payable by the renter.  The amount of the excess vaires by company and by the type of car rented but it means that if there is an excess of 400 and the cost of damage is 100 then the renter will have to pay all of the 100 cost. If the cost of the damage is 500 then the renter will have to pay 400 (the full excess amount), and the car hire company's insurance cover will pay the final 100.

It is also worth noting that some basic CDW cover given by care rental companies will exclude damage to areas of the vehicle such as tyres, wheels, roof, and windows.

If these exclusions and limitations do not meet the hirer's needs, it is usually possible to take out daily car hire excess insurance that will allow the hirer to claim back any excesses paid to the car rental company following an accident or other such problem.  To use the above claim example, the car rental company would still charge the 400 excess to the hirer's credit card, but this could be claimed back through the daily car hire excess insurance policy.

Many people take out this additional rental insurance from the car hire company when they pick up the keys of the car. It is sometimes the simplest way of doing things but buying daily car hire excess insurance at the car rental company desk may not be the cheapest option and it may still contain some exclusions for certain types of damage.

Some specialist insurance companies also offer daily car hire excess insurance.  The cover provided by a specialist company may be similar to that provided by the car rental company or it may offer broader and more comprehensive cover for (eg) excluded areas such as those outlined above.  It is though significantly different in one respect because it is sold to a policyholder and not for a given car hire. It may, therefore, cover any vehicles hired during the life of the policy.

As the hirer has the opportunity to shop around to choose between these specialist policies, buying directly from an insurance company may offer significant cost savings over those policies or 'top-up' insurance policies offer by the car hire companies. In many cases daily car hire excess insurance purchased from insurance companies may also offer additional benefits and cover such as increased personal liability cover.

It is always good practice to examine carefully all the details of an insurance policy before it is taken out and paid for. Daily car hire excess insurance will also contain its own exclusions and conditions and these must be checked to ensure they meet the hirer's needs.