The hidden costs of car rental insurance

How much does it cost to rent a car? What you are charged for using the vehicle is usually only half the story. The price you are quoted will invariably include a car hire insurance package to cover loss of or damage to the vehicle and third party risks of causing loss, damage, injury or death to other road users. But the story doesn’t end there, because the inclusive package is likely to offer such minimal coverage that you’ll want to purchase additional “top-up” insurance.

The three basic areas of coverage generally included in the rental company’s quoted price are: the basic level of third party coverage generally required by law in the country where the vehicle will be used; coverage against the possible theft of the car, including the loss or damage of parts of the vehicle in an attempted theft; and a collision damage waiver (sometimes also called a loss damage waiver) that indemnifies the car lessee against the cost of damage to the vehicle.

So far so good, one might think, with what appears to be a wide range of coverage. However, on closer examination, the level of coverage could still be insufficient for most drivers and underscores an imperative when renting any vehicle: It’s important to check exactly what the waivers and insurance the rental company offers covers and If this is still inadequate, strongly consider purchasing additional cover from an independent specialist car rental insurance provider (as this is invariably cheaper than buying optional ‘top-ups’ directly from the rental company).

The basic car rental insurance package might be inadequate in the following areas: Coverage against third-party claims, for example, often has a maximum limit that would not adequately cover potential third-party claims for injuries requiring extensive medical treatment. , long and expensive, let alone the claims arising from his death. To improve the level of coverage and drive with greater peace of mind, it’s worth considering purchasing Supplemental Liability Coverage (SLI), which typically offers full claims protection of up to $1 million.

The Basic Collision Damage Waiver is a source of considerable confusion (and potential disappointment in the event of a mishap) for many rental car drivers. Most importantly, perhaps, it usually includes quite a considerable excess (in different parts of the world, the excess can range from a few hundred pounds to over a thousand pounds). Any sum excluded from the waiver as an excess, of course, remains the financial responsibility of the renter in the event of damage to the vehicle.

Also, a particularly annoying feature of most damage waiver agreements is that they specifically exclude coverage against damage to certain (albeit vulnerable) areas of the vehicle. These areas include the windows and glass, the wheels and tires, and the roof and underbody of the vehicle. Separate insurance coverage for excess damage waiver and for damage to those areas excluded from the basic car rental insurance package is therefore often an important consideration.