Insurance for hire cars

Renting a hire car can sometimes be risky. Even the smallest of accidents could result in you facing some potentially large bills for repair costs unless you have the right sort of cover through your insurance for rental cars policy.

Doesn’t insurance for a hire car come included ‘in the deal’?

In reality, this is perhaps better thought of as two separate questions:

• Does the hire of the vehicles cost include insurance?;
• Is the insurance adequate for your needs?

The rental car may or may not come with insurance included in the deal. Typically in most of Europe and many other countries it will have some insurance included, whereas in the USA and some other countries it may not.

If it does not have insurance included, the rental company will normally offer it for sale to the customer as an extra. If insurance is included, you may need to look at it carefully to see what is covered and what is not.

What needs to be examined with insurance for the car (or other vehicle) you are hiring?

Once again, this may vary depending upon the country you’re hiring in and the company you’re renting from.

When insurance is included, it typically provides financial protection to cover two forms of risk:

• The risks that other people may sue you for injury you have caused them or for damage you’ve done to their property, with the hire car;
• The risk that the car rental company holds you responsible for damage done to their vehicle while on hire to you – this could be up to the full replacement cost of the vehicle.

The first category of risk is covered by third-partly liability insurance and the second by CDW (collision damage waiver) insurance.

If you do not have these two forms of insurance and with both providing adequate levels of cover, you may end up facing potentially large costs if you have an accident in a hire vehicle.

If these two forms of cover are in place, what else is there to worry about?

The insurance provided by a car hire company, whether included automatically or purchased separately, will typically also contain two limitations:

• It may carry an excess of between £500 - £1600 which could end up being debited automatically to your credit card following an accident;
• It may exclude several areas of the rental car from its cover – possibly including wheels, tyres, undercarriage roof and windows.

The upshot is that even if you have the rental company’s insurance for car rental, you may find yourself facing a large bill after an accident.

Can these cost risks be avoided?

Yes.

You may have the option of paying the hire company extra and for that they may reduce or remove the excess and possibly the exclusions also.

Alternatively, you may find that it can be cheaper to purchase what’s called ‘excess protection insurance’ from an online specialist provider of rental car insurance. If you have a policy of this sort, you could obtain reimbursement of any excess or excluded area costs you’d been forced to pay to the rental company. Naturally you need to check the terms and conditions of the company you are buying from.

Is there more information available?

Yes.

If you’re looking to improve the protection you receive from insurance for rental cars, the sites of the specialist providers typically contain full explanatory details of their products and how they may benefit you. To access a choice of some of these sites Follow this link