Last Updated on Mar 12, 2020 by James W
Ever been confused by the terms, omissions, exclusions and daily charges for car hire insurance? That may not be too surprising given what a minefield the subject might be even for an experienced and well-practiced hire car customer.
The good news, however, that a little time spent getting closer to grips with the intricacies of the subject may save you money on the next car hire insurance you arrange.
Here are some tips:
What’s covered?
- there may be a tendency to think that the so-called comprehensive insurance that comes with your hire car is the same as the comprehensive insurance you have for your own private motor car at home – understanding what is and what is not covered may help you avoid future expense;
- in the UK and Europe, for example, the standard form of hire car insurance specifically excludes accidental damage caused to the roof, underside, windows, wheels and tyres of the vehicle;
In the United States
- if you are planning to drive a rented car in the United States there may be new and confusing insurance terms to learn;
- probably the most common is the Collision Damage Waiver (CDW) – also describe as a loss damage waiver or simply a damage waiver and sometimes car hire damage waiver insurance;
- however, it might be argued that a damage waiver is not a form of insurance, but rather an agreement by the rental company to waive the right to charge the customer for any loss or damage to the hired vehicle;
- rental companies, therefore, avoid use of the term insurance – and the website Wikipedia points out that hire car companies themselves are neither regulated nor licensed as insurers;
- damage waivers may be even more varied – in the scope and extent of cover – than standard forms of car hire insurance used in the UK and Europe;
- although a basic legal minimum of third party liability cover is likely to be included, protection against theft, damage from collisions and other damage may vary considerably;
- the question of car rental insurance in the United States is sufficiently complicated that even local customers may have difficulty in deciding what level of protection might be appropriate – as illustrated in advice given to American readers in Consumer Reports in March 2014;
- clearly, it is important to understand the extent of any cover you are buying in your damage waiver if you are to save money on its cost;
Excesses
- whether you are renting your car in the UK and Europe or the United States, the insurance or any damage waiver you may have arranged through the rental company is almost certain to carry an excess – and a potentially expensive one at that;
- in the UK and Europe it may be described as an excess – in the United States it is more likely to be described as a deductible;
- even though they are not strictly in the business of selling insurance – and are not themselves authorised and regulated to do so – car rental companies nevertheless play on customers’ concerns about adequate protection against risks, and the high cost of an excess in particular, in order to sell insurance products;
- the result of buying from the rental company, therefore, may be that you are poorly advised about the kind and level of insurance you may need and that you end up paying more for it than you might otherwise need to;
Independent providers
- you may be more certain of arranging the cover you need, typically at a more competitive price, through an independent specialist car hire insurer such as Bettersafe;
- based in the UK and with the facility to buy the insurance you need online, such a specialist may provide the cover you need for driving a hire car in the UK and Europe, the United States or the rest of the world;
- by taking into consideration the parts of the world in which you are planning to drive, the standalone insurance policy may be tailored to suit the local regional conditions;
- reflecting the particular complexities, intricacies and omissions of some of the cover available in the United States, for example, standalone insurance from reputable UK underwriters may offer not only reimbursement for any type of excess or deductible, but also include a standalone Collision Damage Waiver (CDW) and Supplemental Liability Insurance (SLI) – the latter increasing the total insured sum against third party claims in a part of the world especially known for its litigious approach to most cases of alleged negligence and liability;
- policies issued by Bettersafe for those driving in the Americas or the Caribbean, for example, include a Collision Damage Waiver (CDW) of up to $100,000 and Supplemental Liability Insurance of up to $1 million;
- whereas the insurance offered to you by any car rental company is likely to be based on a daily rate, standalone insurance issued by independent UK-based specialists involves the payment of just one single premium;
- in return for that premium, you may buy cover for a single trip (of up to 60 days duration); or
- annual cover for as many trips in any parts of the world that you may wish to make – if you are a frequent traveller, therefore, an annual policy may provide the route to making still further savings;
- this insurance also typically covers the ‘excluded’ areas of the vehicle too, such as the tyres, roof and undercarriage etc, providing comprehensive cover.
Weaving your way through the minefield of hire car insurance in different parts of the world may not be easy. It might also be a job made the more difficult by the enthusiasm and zeal with which car rental companies go out of their way to sell you insurance – in addition to renting you the car.
By taking advantage of the experience and expertise of an online UK-based specialist insurance provider, however, you may rest assured that the cover you need is issued by a provider duly authorised and regulated by the Financial Conduct Authority – and is likely to come at a more competitive price than from other sources, thus helping you to save money on the cost of your car hire;
With such a policy safely in your pocket, you may travel the world, hiring cars in the knowledge that many of the financial risks are safely protected.
