WHAT IS CAR HIRE EXCESS INSURANCE?

Luckily due to competition, car rental companies tend to outdo themselves with very attractive offers. But before you fall for it, you should realize that is just the tip of the iceberg; and like most icebergs, most of the bulk is below the surface. In the case of car rentals, insurance fees tend to determine most of the cost.

Typical of most types insurance, which include cost of any “excess”, the person renting the vehicle will bear the cost except if they also purchase a car hire excess insurance.

So what does this mean?

Simply put, a car hirer will be held liable for any damages on the vehicle. This also includes damages caused by others or as a result of an accident. That’s not all, you the hirer will also be held accountable should the rental car get stolen.

When you factor in the new or nearly new condition of most rental cars, the amount in repair or replacement is quite huge and this is not something you’ll want as your cup of tea.

To guard against this therefore, you’ll need to indemnify yourself with insurance.

But there is a problem

Most car rental agreements do not provide you with a comprehensive insurance. What you get as cover is usually known as the Collision Damage Waiver (CDW).

The CDW is expected to protect the hirer from paying for any damage done to the rental car while on hire. It therefore contributes a significant bulk to the overall hire cost since it provides cover for most of the third party risk and damages caused by you driving or using the vehicle.

However, the CDW is not sufficient where an excess is part of the car rental insurance agreement. Secondly, the Collision Damage Waiver does not cover for damages such as those involving the glass, baggage cover, roof, under body areas, wheels, tyres and for lost keys. You the hirer will be held liable for damages to any of these parts of the vehicle.

Unfortunately, the financial risk involved is considerably humongous considering the fact that these parts are fragile or susceptible to one form of damage or the other no matter how careful you are as a car handler. A stray rock smashing into the windscreen or an unseen object piercing the tyres and you’re done for.

Do not despair

Here is the good news

Car hire excess insurance will fill the existing lacuna in the cover you have. And this includes covering for risks listed above. This type of insurance typically cover adults within the ages of 25- 75 and the prices vary from one agency to the other. However, the benefits far outweigh the cost.

This is what happens most of the times. Most rental companies tend to provide as an extra option to the rental agreement a car hire excess insurance which will further protect you against any financial responsibility for the excess and risks not covered by the Collision Damage Waiver or theft provisions of the primary insurance.

Now this should be all, right? Not exactly

You need to avoid additional costs associated with the car hire excess insurance even though having one is a wise decision. Meaning you should avoid paying through your nose for one because it is not uncommon for car rental agencies to want to charge customers exorbitant prices.

To get a better deal, use the services of a company that specializes in standalone car hire excess insurance. Or a car rental service that provides one at a reasonable price.

Furthermore, explore the additional option of obtaining a car hire excess insurance for a full year since it is you and not the vehicle that will be covered by the insurance.

Aside from being cheaper, the additional advantage of this option is that it will cover for multiple car rentals in and around Europe and North America. This particular option is the best if you’re renting cars regularly either for business or personal purposes.

Additionally, doing your due diligence by researching ahead of time for car hire excess insurance is one guaranteed way to ensure you end up with the best rate which will help you some bucks. Don’t wait for car rental services to box you into a corner. So also, ensure you check their terms and conditions carefully so you don’t end up with egg on your face.

Bottom line

A car hire excess insurance at a highly competitive price is one sure-fire way you can reduce the overall car rental costs and avoid the risks of paying huge amounts of money in repairs or replacement.

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