Hiring a car while on holidays can give you the ultimate independence. No need to check bus and train timetables, and you can enjoy the freedom of the open road. But if you have an accident or the car is somehow damaged, you could end up paying dearly, as most car hire companies require you to pay the first several thousand dollars for any damage. Before you book and collect your hire car, consider a few insurance questions.
What is the excess your rental company offers?
Generally, if you damage the car (even if it’s not your fault), your car rental company could charge you an excess or liability contribution of anything up to several thousand dollars. Sometimes, in some places, it could be unlimited. Most companies offer to reduce this excess – sometimes to nothing – but for a significant premium. This is a convenient option, especially if you have left your planning to the last minute, but it is generally the most expensive.
Are you covered by your travel insurance?
The old saying goes that if you can’t afford to buy travel insurance, you can’t afford to travel. But not all travel insurance policies are created equal, and whether your car excess is covered will depend on the policy. Check your policy carefully. It may be that the cover is better than you thought, and if you top up the insurance with the rental company you may be double insured. On the other hand, you may not be insured at all, or only for a minimal sum, and even then only under very restrictive conditions. It’s best to check with your insurer if you have any doubts.
Specific car rental excess insurance
You can buy insurance for anything these days, and that includes a specific policy for your car rental. This can be coverage for a single trip, if you hire cars rarely, or an annual policy for frequent rentals. Generally, these policies offer the best coverage for the lowest premiums, and as always it pays to shop around. A few things to check:
- Are you covered for rentals in your home country, or only abroad (e.g if you live in the UK, are you covered for any cars you rent in UK)?
- Is the limit of the coverage higher or equal to the rental company’s excess? There is not much value in a policy with a limit of $1,000 if your rental company’s excess is $5,000!
- Is the policy worldwide, or limited to a single country/region?
- Are you covered for theft of items (such as your prized SLR camera) from the car?
- Are you buying from a reputable insurer?
Nominate the right driver
Keep in mind that most insurance will only cover a nominated driver who was in control of the car at the time of the damage. This means if you will be sharing the driving, it may be a good idea to nominate all drivers on the rental policy and insurance.
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