One of the things that can be difficult to understand is insuring your hire car. You will notice many different variations of car hire insurance available.
Last updated 13.03.2023
Generally, you will find three insurances included in the rental car rates: Collision Damage Waiver (also known as liability waiver), Theft Protection and Third-Party Liability. These insurances will, in most cases, come in the standard offers. These coverages come with an excess, the maximum amount you would need to pay in case of damages that fall into these coverages.
Collision Damage Waiver offers Coverage only for the bodywork of the car. The engine, windows and undercarriage are typically not covered. You can buy additional Coverage to reduce the excess or extend what the basic Coverage protects.
In car rental, you will find four variations of Coverage
- Broker Coverage
- Buying directly from the car rental company
- Third-Party Coverage
- Declining all Coverage
Each option will have its benefits and disadvantages, so it is always recommended to consider all options and make a choice that suits you best. We will now dig into these options and compare them to assist you in making the best choice for your rental car.
Coverage From Comparison Sites
Purchasing rental Coverage through a comparison site is budget-friendly while still providing extended Coverage. It is cheaper than insurance directly from car rental companies but still offers excellent Coverage for damages that many hire companies do not cover.
The car hire brokerage coverage procedure is to leave a security deposit for the excess to the hire company when picking up the car. In case of damages to the vehicle, the hire company will charge this deposit. Once you return home, you submit a claim to your booking site by providing all documents and photos.
Once the comparison site has confirmed the amount, they will refund you the amount paid for the damages.
For example, Suppose you take our Premium Coverage, something happens, such as damage or theft. In that case, we will reimburse you up to 3000 EUR of the costs charged by the car hire provider.
With Premium Coverage, there are practically no exclusions. We have a transparent claims procedure; you can cancel the protection until the last minute.
Premium Coverage will refund the final cost - if it is clear what the amount is. When you rent a car with us, you can always call our customer service, who will guide you through the process.
Advantages
- Cheaper than car hire insurance
- Offers more Coverage such as windows, roof, tires, wheels and keys.
- If you feel the charge is unjustified, your comparison site can assist you in fighting the charge.
- Get support in your local language.
Drawbacks
- You still need to leave a deposit and pay for the damage upfront
- This Coverage does not reduce your excess or deposit amount
- This Coverage can be more expensive than from a third-party insure
Insurance directly from the car hire company
When you pick up the vehicle, the car hire company will offer you their insurance or liability waiver to reduce the excess. This type of Coverage is more expensive but allows you to return the car without worrying about paying for potential damages. The rental company generally waives its right to charge you for damages.
Advantages
- In case of damage, you do not need to pay anything as long as you meet the terms and conditions of the rental agreement.
- Typically, you will not need to leave a security deposit
- Often, car hire companies will allow you to rent with a debit card as you have minimised the risk in case of damages.
Drawbacks
- It is the most expensive coverage option.
- If you get charged for something you disagree with, you may not have an insurance company to fight the charge for you.
- It is a waiver, where the company waives the right to charge you for the damages but not an actual insurance.
Purchasing Coverage from a Third-Party insurance company
You can find many insurance companies that offer a wide range of car rental protections. It provides you with the same Coverage comparison sites offer but can be found at a better deal.
Advantages
- Often, the cheapest option available
- Provides a wide range of Coverage for the rental car
- You can buy it per rental or have an annual subscription
- You can get assistance if you feel the charges were unjustified
Drawbacks
- It does not reduce your excess or deposit
- In case of damages, you will still need to pay for the damage and then submit a claim later.
Declining additional insurances
When you rent a car, you will always be offered to purchase additional protection through your booking site or at the counter by the car rental agent. These protections are optional, and you always have the right to decline them and stick with the basic waiver that is included.
Advantages
- You avoid any additional costs to your rental.
Drawbacks
- In case of damage, you will lose your deposit.
- You are only covered for the bodywork of the vehicle. So, other damages would be charged in full and can exceed the excess amount.
- If you feel like you have an unjustified charge, you may not have support from other insurance companies.
By comparing these four options, you can define what type of Coverage will suit you best if you prefer to decline and risk losing the deposit or purchasing protection from your comparison site to extend your Coverage.
But most important is understanding this difference and what you are covered for, not when you pick up your rental car. By having this understanding, you can avoid any unnecessary surprises.
Car Rental Insurance Checklist
When you compare different protection options for your rental car, a few things are recommended to look out for. Considering these points can assist you in making the best choice and understanding what is covered and what is not.
- Does it cover windscreens, roof, undercarriage, wheels, tyres and mirrors?
- Does it cover administration costs?
- Does it cover towing costs?
- Does it protect keys and key fobs
- Is it an insurance or a liability waiver?
Frequently Asked Questions On Car Rental Insurances
What is a Collision Damage Waiver?
Collision Damage Waiver, often called CDW, is an optional insurance policy offered by car rental companies to protect renters from financial liability in case of damage to the rental vehicle.
It is not a legal requirement, but it provides peace of mind to renters by limiting their financial responsibility for any damages incurred during the rental period.
What is excess in car rental?
In car rental, the term "excess" refers to the amount of money you would be responsible for paying out of your pocket in case of damage, theft, or loss of the rental vehicle. It is also sometimes referred to as the "deductible." The excess amount can vary significantly depending on the rental company, the type of car, and the specific terms and conditions of the rental agreement.
What if I opt for Coverage through a credit card or liability insurance?
You may have purchased rental car deductible insurance through your credit card or purchased rental car deductible insurance online from a third-party provider.
If that's the case, let me give you some friendly advice: Call your bank and ask for the terms and conditions, review any exclusions, and later call the car rental company and check their policy. And remember, there's something fishy going on when a company wants to sell you rental car insurance and needs help explaining precisely what they're selling.
If you're 100% sure the Coverage will cover everything,-you're on the safe side. But there's a trick. Even though your Coverage will cover everything you need, you'll still need to deposit at the counter. And you'll need to ensure you have a sufficient limit on your credit card (your available cash for the holiday could be anywhere from £700 to £2000 depending on the car you choose).
The procedure for applying for a universal insurance claim or with your bank can be lengthy and complicated. Sometimes, the credit card bank does not reimburse certain damages according to their policies, so you will need to call your bank, check their terms and conditions, ask to be told of any exclusions, and then call the car rental company to check their policies. Gathering all the necessary information can take a lot of time, and you can get frustrated.
Is there any downside to these protections?
Most car rental companies require you to pay a deposit or provide credit card details before handing over the vehicle if you decline their insurance. Buying from a PC cannot prevent this.
PC does not cover vague costs such as vehicle repairs that have yet been approved by the car rental company or administration and driving away fees.
Also, the PC does not cover the car's damage cost if the driver is drunk or driving irresponsibly. But remember, even though by purchasing a PC in the unfortunate event of car damage or theft, you can always recoup the deductible paid to the rental car company - the price is very reasonable.
And again, even though your insurance will cover everything you need, you will still need to pay a deposit at the counter. You need to ensure you have a sufficient limit on your credit card (your available cash for the holiday can be reduced from 700 to 2000 euros, depending on the car you choose).