What Insurance Do I Need When Hiring a Car?

If you’re looking to hire a car, you will need to make sure you are insured against damage or theft of the vehicle and any damage to a third party. Read our guide to ensure you get the right insurance for the vehicle you have hired and the country you are visiting.

car rental sign

What insurance do I need to rent a car?

There are two main areas you should always make sure you are covered for when hiring a car.

Third-party cover for car hire

You should ensure your car hire insurance covers damage to any third parties for either injuries they suffer caused by your rented vehicle, or physical damage to their property (for example, their vehicle), even if it’s not your fault. This is the same cover as you’d have for your own car in the UK.

Normally, in Europe, Australia, New Zealand, Africa and most parts of the Middle and Far East, the car rental company will provide this cover as standard. However, if you are hiring a car in the Americas make sure to check your policy wording carefully, as sometimes car hire companies there will not include this in the cost of the rental.

When in the USA, Canada, The Caribbean, South and Central America you should also consider if you need to top up with a supplemental liability insurance cover, as most car hire companies in these regions offer limited or no third-party liability insurance. Without proper third-party liability insurance for your hire car you could end up in difficulty, particularly if you are involved in a serious accident and face litigation (which could result in costs of hundreds of thousands of pounds, or in some cases, millions).

Collision damage waiver / loss damage waiver (CDW / LDW)

This is the insurance for the vehicle. Again, while normally this is offered by car hire companies in most countries, often in the Americas it’s not included in the car rental package.

If you have CDW included, the rental company will waive the costs of damage to your hire car is damaged. Although you will still have to pay the excess, the rest of the cost is waived.

LDW is the collective name for a policy including both CDW and theft protection (TP), which therefore covers the costs of replacing the car should it be stolen.

CDW / LDW provided by a car rental company may also be subject to an excess, and may exclude damage to certain things like windows, tyres, undercarriage, roof and headlights. It is worth considering therefore also purchasing a cover for this ‘excess insurance’, and insurance4carhire can offer this.

Travel insurance when hiring a car

There is also a third area of insurance you should consider when hiring a car: travel insurance to cover personal belongings when they are in the vehicle, if you are not covered under other travel insurance policies you hold.

Our parent company, Towergate Insurance, can offer this cover.

Key car hire insurance tips