What is Car Hire Excess Insurance?

If you're hiring a car, you may face a potential financial risk relating to the excess on the policy. Car hire excess insurance is something that offers you protection against it.

Renting a car - something to note

Hiring a car in today's internet world is relatively easy.

Yet there is an issue or two that some hirers may be unaware of.

If you're hiring in the UK and most of the EU countries, your car will typically come with various forms of insurance included in the rental cost.

As a general rule, that insurance will cover third-party liability risks and what's called CDW (collision damage waiver). It's CDW that protects you from the costs of needing to pay for any damage done to the rental car while you have it on hire.

You may, therefore, think that you're fully covered by insurance - but unfortunately you typically will not be.

You may still be liable for costs after an accident arising from:

- the excess - a sum of money that could be as high as £1600, which you'll be expected to pay towards the cost of any claims;
- inadequate third-party insurance levels in the standard cover;
- damage to areas of the vehicle (typically the glass, under body areas and tyres) typically not covered by in-the-price insurance.

You may find the financial risks here to be unacceptably high - perhaps running into thousands.

North America and Other Countries

It's worth keeping in mind that in some countries, most notably the USA, the rental price may include very little, if any, insurance. Typically it is purchased separately from the rental company or a car hire insurance provider.

Your options for car hire excess insurance

The rental company may offer you various forms of ancillary insurance, which they'll sometimes describe as car hire excess insurance or perhaps top-up cover.

This additional insurance typically covers things such as damage to the excluded areas of the car mentioned above and all, or part of, the excess.

It may also increase the level of third-party insurance protection you have available.

Typically cheaper options

You may be able to find the same or even better levels of protection against the excess and other potential additional charges through the online insurance providers that offer car rental excess insurance.

The savings may be substantial over similar products offered by the car hire companies.

Your decision

Taking out additional rental car insurance isn't obligatory but it may be a good idea.

The rental company will typically try to sell it to you at the point you're collecting the car - when you may not be in a position to compare their prices against others.

So researching ahead for car hire excess insurance might be something that could save you significant sums of money. Don't forget to check the small print too, as your cover will be subject to policy limitations, exclusions within the terms and conditions.