Wherever in the world you are planning
to hire a car, you can be certain that
the cost of car rental insurance will be
at least as much as the hire of the
vehicle itself. The insurance is vital,
of course, to indemnify the hirer not
only against third party liabilities but
other damage to the vehicle or its
theft, resulting in the loss of its use.
With the car rental insurance bill
absorbing such a high proportion of the
cost, therefore, it is good news to
discover that those costs can be
considerably reduced - by as much as a
half - by arranging all the necessary
insurance separately, in advance,
whether the proposed rental will be in
the UK or elsewhere in the world.
Taking advantage of such cost reductions
is simply a question of buying all the
necessary insurance cover in advance
from a company specialising in this
area. Separating the two forms of
business in this way allows the customer
to concentrate on the car rental firm
for doing what it does best - renting
cars - and leaving the car rental
insurance to the experts in the field of
motor insurance.
For example, whether the car hire is
being arranged in the UK, Europe or
North America, the quoted rate is likely
to include a relatively large proportion
to cover third party liabilities and
accidental damage to the vehicle
(generally termed a Collision Damage
Waiver) and theft. In most parts of the
world (with the exception of the United
States), the Collision Damage Waiver
will include an excess, which is the
uninsured element of any accidental
damage to the vehicle and which
therefore remains the responsibility of
the hirer him or herself.
If an excess is to be applied, this
should be made clear by the rental
company, together with the level of risk
to be borne by the hirer. This is
important, since it represents the first
part to be paid against any damage
incurred and is typically as much as
£600 - and in some instances can be as
high as £1,000. In order to mitigate
such personal risk on the part of the
hirer, the rental company will generally
offer an optional excess insurance
policy to cover the whole or part of the
excess. In this way, it would be
possible to reduce the hirer's personal
liability from the standard £600, for
example, to £100 or even to nil.
A more cost-effective way of insuring
this excess - and indeed the whole of
the car rental insurance - however, can
be secured by buying the cover entirely
separately from the rental agreement.
Specialist, independent insurance
providers can arrange the whole of the
cover required, either on a single-hire
basis or on an annual basis, to cover
multiple rental agreements throughout
the year. Such cover tends to be
considerably cheaper - up to 50% less -
than that arranged by the rental
company, yet can provide even more
extensive protection than the rental
company's insurance.
Typical areas of car rental insurance
cover, for example, include full
Collision Damage Waiver (providing
protection against loss, damage, theft
or loss of use of the hire car);
Supplemental Liability Insurance
(extending third party liability limits
up to a typical US$1 million - and
certainly to be recommended if the
rental agreement is for a car in the
United States or Canada; cover for
damage to the rental vehicle's roof,
underside, types and windows (usually
excluded from the Collision Damage
Waiver); compensation for accidents
involving uninsured or hit-and-run third
parties; cover for lost keys; and cover
for any further excess on the hire car.