Covers people aged 21-84. Up to £2000 excess covered per claim (to total of £3000 per rental agreement) / $80,000 on WW rentals. Insures up to 6 people on policy. Annual policies continuous duration no longer than 31 days - unlimited trips / daily policies no longer than 180 days in one trip. Near home rental available and dual lead driver - see T's and C's for more information
Archive for the ‘Car Excess Insurance’ Category
The basics of car hire insurance
Car hire insurance can be seen as trying to achieve two principal objectives:
- providing you with a level of insurance cover that is required by law before a vehicle can be driven on the roads in practically every country you are likely to be driving; and
- providing you with a level of financial protection (an indemnity) against the cost of replacing the vehicle or having it repaired if it is stolen, lost or damaged whilst in your care.
The first of these, of course, is designed to ensure that you meet at least the minimum legal requirement to drive the vehicle you have hired.
Problems can arise, however, because cars are expensive pieces of equipment and can cause considerable damage and/or injury to third parties. Claims involving your hired vehicle, therefore, could involve such considerable sums of money that the insurance cover provided by the bare minimum of insurance is unlikely to offer you complete financial protection – you remain exposed to the risk of bearing any uninsured losses personally, from your own pocket.
In some countries, for example, the bar is kept relatively low as far as the legal requirement for cover for third party claims is concerned. In other words, you could be faced with potentially huge uninsured losses if you are found liable for serious injury or damage to a third party or parties. There are instances, therefore, when Supplemental Liability Insurance may prove a very prudent addition to your car hire insurance.
But it is not just third party claims, of course. The vehicle you have rented is also a valuable and expensive piece of machinery. It could be damaged in any number of different ways, it could be stolen, it might even be so seriously damaged as to be written off and have to be replaced. A closer examination of the car hire insurance offered by your vehicle rental company is likely to reveal that there would be insufficient cover in place to meet all such losses – and without that cover, of course, you will be held personally liable.
The reason for gap between the car hire insurance that is in place and the potential losses that could be incurred is typically the result of an insurance excess that you agree with the rental company and the exclusion of certain areas of the hired vehicle from such insurance (typically, the windscreen and windows, tyres, wheels, top and underneath of the vehicle).
In order to close that gap, therefore, you might want to consider taking out separate car hire insurance from an independent provider in advance so that you have an insurance package that includes any excess insurance, full cover for any theft of loss or damage to the vehicle, and enhanced financial protection against any third party claims.
What is car excess insurance?
Until you come to hire a car, you might never have heard of car excess insurance.
Most people are familiar with the concept of an excess on an insurance policy. It is the threshold below which an insurer will not pay out for a claim. On many types of policies it is easy to see why the excess has been set at a certain level. For example, you can see why an insurance company would not want to pay out for every £50 scrape to a bumper; or on a house insurance policy for every drainpipe that falls off a roof in a storm. The administrative burden of processing such claims would far outweigh the benefits of the payout to the customer.
So what is the point of car excess insurance? This cover usually applies to cars that have been hired, where the excesses are traditionally higher than those in policies relating to owner-drivers. When you consider that excesses in such policies may stretch to £1,500 and beyond, suddenly a car hire excess seems worth insuring.
Without excess insurance, if a hire car has been damaged, the standard position of the car hirer is to make a claim on their only insurance policy, but only if it is appropriate. If the excess stands at £1,500, the car hirer will typically be liable to pay for all of the cost of repairs, if the total repair bill is under that £1,500 figure. However, if the cost is over £1,500, the car hirer may find himself paying the first £1,500 to the hire car company, with their insurer picking up the rest of the bill.
This is where car excess insurance steps in. If the damage to the car is worth less than £1,500, the excess insurer can typically pick up the whole cost. And if the repair bill comes to more than £1,500, the excess insurer will pay the first £1,500 to the hire company, and then your “main” policy takes over and pays the rest. Effectively, they step into your shoes from the point of view of the excess part of the main cover.
But such excess insurance can benefit you in other ways too. Insurance policies for hire cars are often kept quite basic to keep them affordable, which means that they sometimes exclude cover for the cost of repairs to tyres, glass and even damage under the body of the car. If you purchase excess insurance, you can sometimes “top up” the initial hire cover you purchased to extend to these items. And some policies may even include them as standard.
As with any insurance product, it is important to check that the cover offered by your car excess insurance policy suits your requirements. Check that the schedule mirrors the hire agreement and general insurance. So, for example, check that the geographical limitations are the same and that the same people are covered by the policy.