Renting a vehicle for your next road trip is not just about comparing prices and finding the cheapest car. Car rental insurance is a very important and complex issue, it is not possible to rent a car without an insurance policy. Having an insurance when renting a vehicle is the right step for both you as renters and the car rental companies (and of course the insurance companies).
Car rental insurance can be a difficult, expensive, complicated and incomprehensible issue. You need to keep in mind that, at the end of the day, having car rental insurance is in your favor. When you rent a car, it is advisable to evaluate the issue in a positive way, because in the event of an accident, it is the insurance company that takes responsibility for the damages.
The differences in the insurance policy vary from one rental company to another. The differences in the amounts can reach hundreds of Dollars, it is advisable to make a comparison in the rates of the insurance companies that insure the vehicles.
The insurance policies are fixed and cannot be changed either by the renter nor by the rental company, except for changes in the policy to conditions such as: age, seniority, type of vehicle and number of previous claims.
The policy rate is determined according to number of days that you rent the car. In most cases the price of the policy in the first week will be 10 percent of the total annual policy of the vehicle. Each additional day will be 3 percent of the annual policy of the vehicle per day. As you can understand, this is a good source of income to the rental companies.
Even if you have an insurance is place, you are still obligated to pay a certain amount, known as “excess” or “deductible” in the event that the car is damaged. The amount of the deductible varies and is determined in advance, according to the type of vehicle, the age of the driver, the seniority of the driver, etc …
The amount of the deductible might range between EUR 500 to EUR 2,000, mainly depending on the type of vehicle. When an accident occurs and it turns out that a third party is to blame, then you will still need to pay the excess, but the rental company might sue a third party and you will be refunded. Every rental agreement has its exclusions. For example: the rental company will not return the money to the renter if he was under the influence of alcohol or drugs.
Why is Car Rental Insurance Expensive?
Unlike the insurance of your own car, when you rent a vehicle, the identity of the driver is not known to the insurance company, and they cannot know if you have previous convictions or claims. Moreover, since the renter does not own the vehicle, he might treat it with less care than his own vehicle or personal belongings. Thus there is more damage to rented cars that has a large turnover of drivers and each driver treats the car differently.
Types of Insurance
This insurance provides comprehensive coverage for vehicle damage. If the vehicle is damaged in one way or another and if the vehicle is in “Total Loss” condition the insurance company covers the damage. The damages that fall under this category, among others, are, fire of the vehicle, theft, broken windows, third party, floods and damage to the vehicle when attempting theft.
Collision Damage Waiver – also refers to LDW – Loss Damage Waiver. This is an insurance which protects the renter from full participation in damage to the rented vehicle or third party in case of accident. Do not forget, you are still liable to pay the excess/deductible. Basically, this is a clause where the insurance company covers for any damage to the vehicle or theft except for certain items such as tires or windshields.
Super Collision Damage Waiver – this is an extra add-on that the rental company will try to sell to you in order to eliminate the deductible and reduce it to zero. The cost of this add-on vary from one rental company to another and is priced $15-$25 per day. This is very expensive and may double the price of the rental vehicle. If you wish to reduce this cost, it is recommended to car hire excess waiver cover from an independent 3rd party insurance specialist.
Third Party Insurance
This insurance covers the event of an accident the damage to the vehicle or in the event of injury to another person, usually this insurance is included in comprehensive insurance. This is third party insurance, and in case you do not have comprehensive insurance it is recommended to consider third party insurance.
Before you turn to renting the car read the insurance policy carefully, see what the insurance company offers, what type of insurance and what is included in the insurance, if it is comprehensive insurance check what the insurance contains and what does not, what damage the insurance covers.
Personal Accident Insurance – insurance in which the insurance company provides a one-time payment to one of the occupants of the vehicle in the event of one injury or another or death, including payment to a hospital.
Personal Effects coverage – insurance in which the insurance company provides payment for the theft of the vehicle or theft of items from the vehicle of one of the passengers.
This is insurance which is used in the United States, the insurance extends the renter’s coverage in case of third party injury.
Car rental companies in most countries are required by law to include liability insurance. However, even if you have collision damage waiver and comprehensive insurance, you may need to purchase additional damage waivers. Keep in mind that if you purchase the waiver offered by the rental company it might double your rental costs. In order to avoid these hefty costs, we recommend that you check if your existing car insurance covers damage to a short-term rental. Alternatively, you can check if your credit card provides “free” collision coverage for car rentals. Lastly, you can buy collision damage waiver from Third-Party Car Rental Insurance providers. Simply search the web for “car hire excess waiver” and find the best option for your next trip.