Thursday 1 October 2009

Who needs car rental excess insurance?

Just filing a few old emails and came across this Google Alert from those people at insurance4carhire.com with the following article.

Car rental excess insurance exists to give people renting cars additional security and peace of mind.

It is a sad fact that accidents can happen at any time including when driving a rented vehicle. In such circumstances the insurance cover that is included as standard with the vehicle rental may prove to be limited and involve the renter in significant additional payments towards the cost of any claims arising.

When booking the vehicle initially the hirer should check carefully to see what insurance is included as this varies by country and rental company. It may or may not include cover for things such as third party, fire, theft and damage to the vehicle itself. Not only should the areas covered be confirmed, but also any exclusions and limitations. As an example, it is always important to ensure that the third party insurance levels are high enough to meet the hirers needs and potential exposures.

In many countries the basic insurance that comes with the vehicle typically provides cover for fire, theft, third-party claims and some forms of damage to the rented vehicle with this latter usually called Collision Damage Waiver or CDW. For all categories of claim the policy may contain large excesses in other words the first part of the total claim amount that the renter will be expected to pay in the event of an accident.

These excesses could amount to very significant amounts of money running into hundreds or possibly thousands of pounds/dollars that the renter would need to find following an accident.

It is usually possible to reduce the excesses payable and broaden the cover by paying the car rental company for top-up insurance at the time of rental and this is also sometimes called car rental excess insurance. This usually has to be done on a rental-by-rental basis and may prove expensive.

There is another insurance alternative that can reduce these risks and costs.

Specialist car rental excess insurance offers protection against these excesses and can be purchased on-line through various insurance companies. In the event of an accident, the renter will pay the excess as stipulated by the car rental policy, but then claim this amount back through their car rental excess insurance policy.

This type of insurance may also offer other significant advantages. Many basic insurance policies that come as part of the rental itself may exclude damage to some parts of the rented vehicle including windows, glass, roof, wheels and tyres.

Many car rental excess insurance products will include cover for these items as part of their basic policy, thereby allowing the renter to claim back any payments made for damage to those areas. They may also increase the amount of personal liability cover provided for the hirer.

Another possible advantage arises from the fact that car rental excess insurance is sold to the policyholder and is not restricted to a given car rental arrangement or company. What this means is that it may be possible to purchase this type of insurance to cover all car rentals during a given period of perhaps 3 months or even a year. Typically this will offer cost and logistical advantages to renters, particularly those planning to rent several times in a period of time.

Car rental excess insurance may have its own conditions and limitations. Policies of this type may only cover rentals that take place more than a specified distance from the policyholders home. Typically they will also exclude specialist rentals such as goods vehicles, sports cars, vintage or antique vehicles and very high value cars such as a Rolls Royce. As is good practice with all types of insurance, the policy details should be checked before purchase to ensure that they will meet the needs of the individual renter.

Car hire insurance policies can vary in cost and detail of cover and it would be sensible to check the details carefully before purchase.

Interesting, reminds me must renew my car hire excess insurance later this month as it expires soon and it is always good to have peace of mind with an annual polict in case you have to suddenly go somewhere and need to hire a car.

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