So how can the insurance company charge you for the cost of an accident even though you had purchased insurance from them? This is explained by something called insurance excess. The excess is stipulated as a financial amount, usually between 500 and 1500 pounds that the insurance company will expect you to pay towards the cost of an accident.
They may call this the ‘first part’ of a claim because of how it works. If the policy carries a 750 pounds excess and you have an accident that causes 1000 pounds worth of damage, then you will have to pay the first 750 pounds of that 1000 as the ‘first part’ of the damage repair. If the damage was valued at 500 pounds, you would have to pay the full 500 pounds and the car rental company’s insurance would pay nothing.
This cost would usually be charged back directly to your credit card and it can prove controversial given that the renter usually has little control over who assesses the damage, who repairs it and at what cost.
Many people are understandably nervous about their excess and look for ways to reduce or eliminate it. There are usually two main ways of achieving that through something called car rental excess insurance.
The car rental company will be happy to sell you various forms of additional insurance, including this one. For an extra payment they will reduce the amount of excess payable, or in some cases, remove it entirely. Unfortunately you may find that their additional cover of this sort is expensive when compared to the other option.
There are direct insurance companies that sell car rental excess insurance through the Internet. These specialist suppliers are usually much cheaper than the car rental companies. Their policies operate by reimbursing you for any excess charge that the car rental company debit to your card.
As this type of policy also applies to you the renter rather than a specific car rental agreement, they also have the advantage of being purchasable for a period of days or even a year. What this means is that any vehicle rented by you during that period, providing the terms and conditions were met, would be automatically covered. This offers considerable benefit not only in terms of being able to purchase cheaper car rental excess insurance but also in terms of flexibility as no longer would you need to debate insurance options every time you arrived to collect your rented car.
The importance of taking out car rental excess insurance should never be underestimated and is something that should be considered by anyone who rents a car.