A Guide to Car Hire Insurance

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.

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, offers Travel Insurance.

Key car hire insurance tips

  • Always check what’s included as well as what isn’t – good advice for all insurance policies, but particularly so for car hire insurance as it can be complicated. Always check your policy carefully for features, limitations and exclusions. 
  • Check if basic insurance is included in the car hire price – Car rental sites might not always be clear in telling you that the headline car hire price they display doesn’t include even a basic insurance package. Make sure you check before you buy, or you could have to pay out for insurance separately when you arrive at the car rental desk.
  • Book using a UK car hire website – Particularly when hiring a vehicle in North, Central or South America, it is worth trying to book through a UK website (e.g. .co.uk rather than .com). This is as UK sites usually include basic insurance as part of the standard quotation. However, as usual, make sure you check this is definitely the case before you buy.
  • Bring a credit card when picking up your car – remember to have your credit card when picking up the car you have hired, as you’ll have to leave a deposit with the car hire company to pay for the excess (which you can then claim back, if your insurer covers this (as insurance4carhire can).
  • Shop around for car hire insurance – There are a lot of deals out there for car hire insurance, and in such a competitive market, if the deal sounds too good to be true, it probably is. Shop around and check the details of your potential policies. Also look at the customer reviews before you book – they speak true!

Why choose a policy from insurance4carhire?

Excess cover is often offered when you pick up your rental car, but at a high cost - between £9 and £20 per day. A policy from insurance4carhire will cost you from £12.79 per trip or from £46.99 per year* and will cover your excess - up to £6,500 per claim. 

About the author

Adam Summersby - blog author, car hire excess insurance business unit directorThis is a marketing article from insurance4carhire by our car hire excess insurance business unit director, Adam Summersby. Adam is a respected leader with 11 years’ varied experience in niche personal and commercial lines insurance, including caravan, site operators and excess reimbursement, with proficiency in leadership, sales and account management.

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