When hiring a car, you will need some form of insurance. That insurance may be included (in part) in the rental fee or you may have purchased it from the car rental company as a series of separate items. Whichever is the case, this insurance may not protect you from the full costs of an accident in the rented vehicle.

You may also need something called Daily Car Hire Excess Insurance.

That’s because the car rental company’s insurance policy will almost certainly come with what is called ‘Excess’. The excess is an amount of money that the car rental company will expect you to pay towards the costs of any claim – even if you have their insurance in place.

They may refer to this as the ‘first-part’ of any insurance claim and the amounts can be significant. Depending upon the country you’re renting in and the rental company concerned, the excess can be set anywhere between 500 and 1500 pounds or perhaps even a little higher.

The way it operates is simple if financially painful! If there is a 1000 pounds excess on the car hire company’s policy and you have an accident that results in a 1500 pounds claim, then the rental company will debit your credit card with 1000 pounds as the ‘first part’ of that claim. If the damage happened to result in a claim for only 400 pounds, then you would have to pay it all. It’s worth remembering that excess charges following an accident with a rented vehicle can prove controversial. You may have little or no control over who assess any damage, who repairs it and at what cost.

Understandably, the excess and the financial risks it constitutes, may make many renters uneasy. There is though a way of protecting yourself against this – daily car hire excess insurance.

Through the rental company, you may be able to purchase additional insurance that will reduce or perhaps eliminate the excess altogether. They may call this ‘excess insurance’, ‘SUPER-CDW’ or more commonly ‘top-up insurance’. Whatever it’s called, it’s likely to be expensive and far more so that the same insurance purchased elsewhere.

If you look through the Internet, you’ll find direct insurance providers who also offer various forms of car rental insurance including daily car hire excess insurance. Their policies are usually very significantly cheaper than the same products sold by the car rental companies.

It also works simply – you purchase the insurance for a specified number of days (they also offer policies on an annual basis) and the insurance company would then reimburse you for any excess payments the car rental company may charge you.

These companies offer daily car hire excess insurance policies that are not only cheaper but which also offer other advantages. As they are sold to a policyholder for a period of time, they will cover any vehicle rented during that period (subject to terms and conditions). This could offer major flexibility benefits. It may well be worth making the effort to check out these companies and their products in a little more detail.

Source insurance4carhire.com May 2009