It may be very expensive if you have an accident in a hire car and you don’t have sufficient insurance, the costs to you could be seriously high so insurance for hire cars is critically important.
There are two main types of insurance that apply here. The first type of insurance is called third party liability. It basically means that the renter has to have insurance to cover any claims they may receive if he/she has injured a third party or damaged their property.
In the UK this insurance comes with hire cars and by law it must be unlimited to cope with any court awards however large they may be. In other countries the car rental company may cap the maximum payout level at an unrealistically low amount so you have to be cautious. If a court of law awards an amount higher than the liability cap, it will be you who will have to pay the difference.
The second type of insurance for hire cars is called CDW - Collision Damage Waiver and there is more information at http://www.insurance4carrental.com/Collision_Damage_Waiver_CDW.htm This gives protection against damage caused to the rented vehicle while the renter is responsible for it. This cover usually includes theft protection. Once again, if the person hiring the car does not have this in place and the car is damaged, it will be the renter who pays.
Car rental companies may include one or both types of this insurance in the rental price or they may invite you to purchase them separately, so you will need to look at this very carefully when you book the rental.
Whichever is the case in an individual rental, this insurance is likely to be very much more expensive if purchased from the car rental company than if purchased from a direct insurance provider through the Internet.
Of course you the renter are under no legal or commercial obligation to take the car rental company’s insurance. In many cases you can decline it and use your own insurance that you have purchased separately, on line or by phone thereby saving yourself a lot of money. If the car rental company has included insurance in a ‘special deal’ price where it cannot be unbundled from the rental cost, you may still need to consider alternative sources of insurance and check exactly what it covers.
In the “the special deal”, the renter may be limited in terms of its cover. It will very likely carry excess (an amount up to 1500 pounds that you would have to pay towards the costs of any accident) and exclude damage to several areas of the vehicle that are typically easily and expensively damaged even in minor accidents. It might not cover damage to tyres, wheels or the undercarriage and windows of the vehicle.
Of course, you the renter can buy additional insurance for hire cars to cover these gaps and financial exposures from the car rental company itself, however this is likely to again to be very expensive. The same type of cover can be purchased from the direct car hire excess insurance providers at significantly lower cost.
Should you be charged excess by the car rental company following an accident or for repairs to a part of the vehicle ‘excluded’ by their policy, you can them claim this back from your direct insurance. It could potentially save you a lot of money and that is most important for all of us.