Knowing whether you need to purchase car hire excess insurance is a good start when you decide to rent car. Making sure you’re protected if there’s an accident is important, but do you need the extra car hire insurance options that are offered when paying for your car? The short answer is not always. But let’s find out more.
What is car hire excess insurance?
Car hire excess insurance cover (or supplemental car hire insurance) is a protection plan for a fee that provides coverage for out-of-pocket expenses you may incur if there’s an accident or damage to a car rental. Rental agreements can include an excess amount or high deductible that you are responsible for if a hire car is in an accident, stolen, or damaged.
How much is the excess you have to pay for your car hire?
Car hire excess cover or deductible amounts can vary wildly. Factors include the hire company, the car type, the location, and the rental agreement terms. Excess amounts are usually outlined in the rentalagreement and can range from a few hundred to thousands of dollars.
What is covered by car hire excess insurance?
Depending on the policy’s terms and conditions, the insurance can cover some or all of the costs should you get in an accident.
How does it work?
In the UK, there are three main types of hire coverage (with two extras you may want to consider):
- Third party liability: This ensures you are covered for death, damage, or injury of another person or vehicle in an accident you are liable for.
- Collision or loss damage waivers (sometimes known as a “super” collision damage waiver): CDW cover damage to most of the car’s exterior, but not the wheels, windows, or interior. Meanwhile, an LDW offers theft protection and covers any subsequent damage.
- Car hire excess insurance (or excess reimbursement insurance): This is designed to repay you the amount of a policy excess you have to pay when you make a successful claim under a primary insurance policy.
- Personal accident insurance (PAI) and roadside assistance: PAI covers medical expenses if you or your passengers are injured in a car accident. Meanwhile, roadside assistance could come in handy for helping you get the car back on the road in case you get a flat tyre.
In Europe, car hire nearly always includes third-party coverage (damage to other people or vehicles), but not the risk associated with damage to the vehicle itself or theft. Since your personal car insurance will not apply in Europe, you will have three main options:
- Buying a collision damage waiver from the car rental company
- Using zero-deductible collision coverage that comes with some credit cards
- Purchasing collision coverage through a travel insurance provider.
Do I need a car hire excess insurance?
This depends. If you have third-party and comprehensive insurance for your vehicle, the coverage likely extends to when you are driving a hire car in the UK for personal reasons. If you’re travelling abroad, for business purposes, or simply want more coverage, you might need extra car hire insurance.
In Mexico, for example, you must buy extra coverage from a travel insurance provider or a car hire company to satisfy the mandatory insurance requirements.
Other instances where you will want to consider purchasing extra insurance include if you don’t own a car and you hire one occasionally (in this case, you probably don’t have personal car insurance), or if your personal policy only includes third-party insurance and not comprehensive or collision coverage.
What is the best way to cover car hire excess?
One of the best car hire excess insurance options or ways to cover excess is to buy insurance from a third-party company. The price for extra protection insurance can be lower than buying additional coverage from a rental company.
The only downside is that if the car gets damaged, you’ll have to pay the hire company first and then claim it back to your insurance.
The collision damage waiver (CDW) as an alternative
Car hire companies typically offer a collision damage waiver when you make an online reservation and again when you pick up the vehicle. When you buy one, the company forfeits the right to charge you for damages to the hire car, but note that CDWs typically don’t cover tyre and side mirror damage or damage from “gross negligence,” such as speeding or driving while intoxicated.
Conclusion
Hopefully, we've taken the headache out of the car hire process at home and abroad, and if you're ready to hire a car for your next holiday, we’re here to help.
Frequent question about car hire insurance excess
Car hire excess insurance protects you from having to pay high amounts of excess as a result of damage or an incident to your hire car.
Zero excess car hire is when your car hire insurance includes zero excess for bodywork damage or theft. Some elements may be excluded from the zero excess coverage such as damage to windscreens and tyres.
Car hire excess insurance is available through car hire companies and third party insurance providers, who might offer a better deal. If you are booking travel insurance for your trip abroad, car hire excess might be included in the policy, while if you are hiring a car locally, double check your regular car insurance policy, as it may also include hire car excess insurance.
