Thinking twice about car hire insurance
June 9th, 2011It may be that you take your car hire insurance a little bit for granted.
Perhaps you have seen car rental advertisements declaring that your car hire is “fully inclusive of insurance”. Perhaps, understandably, you may have concluded that everything to do with insurance is taken care of at the time you book your car and pay the money.
Unfortunately, it may not always be quite as simple as that.
The reality of the situation may differ depending upon what country you are renting the car in.
UK car hire considerations
In the United Kingdom, as per most other countries, car hire insurance typically provides two forms of insurance protection:
• third party liability – this offers you financial protection against the costs arising (including court awards) should someone take legal action against you for injuries you have caused them or damage to their property, with the hire car;
• collision damage waiver (CDW) – this means that you will not have to pay for any damage to the hire car (or to replace it if it were stolen) while under hire to you.
In the United Kingdom, by law, the car hire company must provide the rental car with unlimited third party insurance included in the rental price.
The word ‘unlimited’ is important, as it means any court awards against you, however large, would be met by your insurance.
Your rental car may or may not have CDW included in the hire price.
Note though, that the CDW provided by a car rental company may contain:
• an excess – an amount of money (perhaps up to £2000) that you will be expected to contribute towards the cost of any claim before the insurance took over to pay the rest;
• exclusions – you may find that parts of the car such as the roof, tyres, windows, wheels and undercarriage, are all excluded from the policy’s cover, meaning that you will have to pay for them if they are damaged in an accident.
Hiring a car outside of the UK
As well as thinking about general travel insurance, it might be advisable to look carefully at your car hire insurance cover because:
• CDW may not be included at all and if it is, it may be subject to the same restrictions as above;
• in some countries, there may be little or no third party liability included in the basic price.
Travel insurance and protecting yourself with car hire
It is possible to take out what is called car hire excess insurance that means, if you incur additional charges from the hire company for excess contributions after an accident, your own excess insurance policy may typcially reimburse you.
You may also be able to purchase something called Supplemental Liability Insurance (SLI) to increase the amount of cover you have in those countries where the ‘included in the car hire insurance price’ cover may be limited.
