Tuesday 8 November 2011

Rental Vehicle insurance

In practically every country in the world, by law you will need some form of rental vehicle insurance for a car, van, motorhome or mini bus that you are hiring if you are the driver of that hire vehicle.

Usually the law will stipulate that you must have a certain minimum level of third-party liability cover so that any awards against in the even of an accident and you have injured someone (or damaged their property) with the hire vehicle. In general most car hire / motorhome hire / van hire companies will include this ‘minimum third-party cover’ in their basic rental price.

The system can vary from country to country and it is always an idea to being somewhat cautious. In some countries such as the USA, individual State or national laws may set the required minimum at a very low level. If the rental car comes with say US $25,000 of third party cover and following an accident you have $500,000 awarded against you, then it will be you the driver to personally have to find the balance of $475,000! This is a very serious matter.

In the UK the third-party protection that comes with the vehicle rental insurance as ‘included in the price’ must provide unlimited financial protection by law.

In some countries the rental vehicle may also be provided with CDW (Collision Damage Waiver) included – even where it is not, the hire company will usually offer it to you to buy in addition. This can be at the time you book the vehicle or when you go to collect it.

The CDW function is to cover you against the cost of any damage incurred by the rental vehicle while it is being hired out to you. This protection includes theft. If the vehicle sustains damage and you do not have CDW then it will be you who has to pay for any repairs and vehicle repairs cost a lot of money normally and often you have no control on the amount that the repair company is charging unlike if it was you personal vehicle back home.

The Collision Damage Waiver / CDW provided by the rental companies will possibly contain some clauses that may also get you reaching for a small bank loan following an accident, but how many people actually reads this? Probably not too many like a lot of small print on documents.

Vehicle renters may find that the policy won’t cover the vehicle in total and that some areas or parts are excluded from cover. It will also typically contain a large excess that may fall in the range £500-£1600. That may be debited to your credit card after an accident as your ‘mandatory contribution’ towards the total cost of the claim and as the vehicle hire company has your credit card details there is not a lot you can do.

As you will not want to risk exposing your personal finances to a claim as a result of third-party or CDW limitations, you can protect yourself by taking out a little extra insurance. This is excess insurance.

Quite often the vehicle rental company will offer you what they may describe as ‘rental car/ rental van insurance top-up’. This means that for an additional sum they may remove the excess and cover the entire vehicle. In countries where it is applicable, they may also offer something called ‘Supplemental Liability Insurance’ (SLI) which can boost the amount of protection you have for third-party claims.

It is usually more economical for the person renting the vehicle to get the same protection at a lower cost by taking out a policy with an online insurance specialist provider of rental car insurance like those advertising on the www.insurance4carrental.com  site. If you have one of their policies you would simply recover from them any costs debited to your credit card by the rental car company for items like the excess.

Many of these specialist insurance providers offer daily or annual policies for car hire and daily policies for van and motorhome hire excess. Some will even cover the older renter age group 75 – 85. After all people are living longer these days and going off on vacation more often in later life. In fact the way various Governments are now changing the retirement age, many more people will be taking later life holidays.

Unfortunately hiring a rental vehicle be it a car, van, motorhome or even a minibus is not one hundred per cent straightforward so do make sure you have adequate protection when you rent. Start by visiting http://www.insurance4carrental.com/ today. You choose which company you want to use and make all the arrangements direct with the individual insurance company.


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