Renting a car in the UK or abroad can be a convenient way to explore new destinations, but understanding the potential financial risks is crucial. Car Hire Excess, also known as the Collision Damage Waiver (CDW) or excess fee, can be a significant financial burden if you're not adequately prepared. This guide delves into the world of Car Hire Excess insurance, explaining what it is, why it's important, and who should consider purchasing it for complete peace of mind during your rental journey.
What is Car Hire Excess?
Car Hire Excess refers to the amount you're liable to pay your rental company if your rental vehicle is damaged, as outlined in your rental agreement. This is sometimes referred to as an excess waiver. The amount of the excess varies across rental companies but typically falls between £500 and £2,000.
The insurance offered by car rental companies to cover this excess can cost £9 or more per day, but it often excludes damage to commonly affected areas like the windscreen, tyres, bodywork, and interior.
Why is Car Hire Excess Insurance important?
While car rental companies offer CDW options to reduce your excess liability, these often come at inflated prices, significantly increasing your overall rental cost. This is where Car Hire Excess insurance steps in, offering a much more affordable solution.
Here are the key benefits of having Car Hire Excess Insurance:
- Significant cost savings: Standalone Car Hire Excess insurance is substantially cheaper than the CDW offered by rental companies. You can potentially save hundreds of pounds by purchasing separate insurance beforehand.
- Peace of mind: Knowing you're financially protected against unexpected costs provides immense peace of mind during your rental period. You can focus on enjoying your trip without worrying about potentially crippling financial consequences.
- Wider cover: Many Car Hire Excess insurance policies offer broader coverage than the standard CDW provided by rental companies. This can include protection against:
- Windscreen damage
- Tyre damage
- Misfuelling
- Undercarriage damage
- Theft
- Claim reimbursement: In the event of a covered incident, Car Hire Excess insurance reimburses you for the excess amount you pay to the rental company, mitigating the financial blow.
Who should consider buying a Car Hire Excess Insurance policy?
While everyone renting a car can benefit from Car Hire Excess insurance, some situations make it particularly valuable:
- Frequent renters: If you rent cars regularly, whether for business or leisure trips, having a standalone car hire excess insurance policy can save you significant money in the long run compared to repeatedly paying the rental company's CDW charges.
- Budget-conscious travellers: For those on a tight budget, Car Hire Excess insurance offers a cost-effective way to protect yourself against financial risks without breaking the bank.
- Those hiring high-end vehicles: Luxury cars often come with much higher excess fees. Car Hire Excess insurance can significantly reduce your liability in case of damage to such vehicles.
- Drivers less familiar with local roads: If you're driving in an unfamiliar area or on challenging terrain, the risk of encountering unexpected situations increases. Having Car Hire Excess insurance (UK) provides a safety net.
Additional considerations when choosing Car Hire Excess Insurance:
When choosing car hire excess insurance, it's crucial to compare policies and understand the specific coverage offered. Key factors to consider include:
- Excess amount covered: Ensure the policy covers the maximum excess amount you could potentially face with the chosen rental company.
- Types of damage covered: Make sure the policy covers the types of damage you consider most likely, such as minor scratches, windscreen damage, or tyre punctures.
- Claim process: Choose a provider with a straightforward and efficient claim process to ensure a hassle-free experience in case you need to file a claim.
How much does Car Hire Excess insurance cost?
With Gigasure, Car Hire Excess insurance costs from as little as £3.41 a day for a 3-day European policy, policy or from £31.85 for an annual European policy.
If you are hiring a car outside of Europe, premiums start from £4.94 per day for a 3-day policy (£4.77 per day if hiring in the USA or Canada) and £34.63 for an annual Worldwide policy, or £33.43 for an annual USA and Canada only policy.
Conclusion:
Car Hire Excess insurance is an essential tool for protecting yourself from the financial burden of potential damage to your rental car. By understanding its benefits, comparing policies, and choosing the right cover, you can enjoy your car rental experience with peace of mind, knowing you're financially covered in case of unforeseen circumstances. Remember, the small investment in car hire excess insurance can save you a significant amount of money and stress, allowing you to focus on creating unforgettable memories on your travels.
At Gigasure, we've upgraded the insurance experience. Our innovative product simplifies the purchasing process to just three effortless steps, allowing you to secure your insurance cover with unprecedented ease. But that's just the beginning.
Once you've purchased your policy, the Gigasure app becomes your gateway to a seamless insurance journey. From managing your existing policy to submitting claims or connecting with our support team, everything is accessible with a few taps on your device. Say goodbye to the complexities and frustrations of traditional insurance.
We're redefining how customers engage with insurance by prioritising transparency and user-friendliness. Our policies are presented in clear, easy-to-understand language, ensuring you have a comprehensive understanding of your coverage and terms. No more deciphering convoluted legalese or feeling lost in the fine print.
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You can find answers to your top questions below or visit our FAQ page for all Car Hire Excess insurance details.
What is Voluntary Excess?
When buying a policy you have the option to include a voluntary excess of £250 which will reduce your overall premium. If you choose this option, the voluntary excess of £250 will be deducted from the first part of any claim you make for these sections of policy cover:
- Excess Insurance
- Collision Damage Waiver / Loss Damage Waiver
- Locked Out of Vehicle
- Misfuelling
Is it better to have excess or no excess when buying Car Hire Excess insurance?
When considering Car Hire Excess insurance, the choice between having an excess or no excess depends on your personal preferences, risk tolerance, and budget. Here's a perspective on both options:
Having an excess:
- Generally results in lower premiums, making the insurance more affordable.
- You assume a small portion of the risk, which can make you more cautious while driving.
- Suitable for those who are confident in their driving and are willing to take on some financial responsibility.
No excess (also called zero excess):
- Provides complete peace of mind as you won't have to pay anything out of pocket in case of a claim.
- Simplifies the claims process as there's no need to pay upfront and then claim back.
- Often preferred by those who want maximum protection and are willing to pay higher premiums.
Ultimately, the best choice depends on your individual circumstances. If you're on a tight budget and comfortable with some risk, an policy with an excess might be preferable. If you prioritize complete coverage and simplicity, a zero excess policy could be the better option, despite the higher cost.
Consider factors like the duration of your trip, the value of the rental car, and your personal financial situation when making this decision. It's also worth comparing the cost difference between policies with and without excess to determine if the additional premium for zero excess is worth it for your specific situation.
Should I buy Car Hire Excess insurance from the car hire company?
Purchasing Car Hire Excess insurance from the rental company is often not the most cost-effective or comprehensive option. Here's why:
- Cost: Rental companies typically charge premium rates for their excess insurance, often significantly higher than third-party providers.
- Limited coverage: The policies offered by hire companies may have more exclusions and limitations compared to specialized third-party insurers.
- Pressure tactics: You might feel pressured to make a decision at the rental counter without time to properly review the policy.
- Daily rates: Rental companies often charge daily rates, which can add up quickly for longer rentals.
- Alternatives: Many credit cards offer rental car coverage, and standalone policies from third-party insurers are usually cheaper and more comprehensive.
- Flexibility: Third-party policies often allow you to cover multiple rentals over a year, providing better value for frequent travelers.
However, buying from the rental company can be convenient and might be necessary in some countries where third-party insurance isn't recognised. It's always best to research your options in advance, compare prices and cover, and consider your specific needs before making a decision.
Can I get annual Car Hire Excess insurance?
Multi-trip Car Hire Excess Insurance, also known as annual Car Hire Excess Insurance, is available and ideal for frequent travellers who rent cars multiple times a year. This type of policy typically provides cover for 12 months from the start date, allowing for more car rentals within that period. It's generally more cost-effective than purchasing single-trip policies for each rental, especially if you rent cars three or more times annually. These policies offer convenience by eliminating the need to arrange new cover for each trip and often provide worldwide coverage, though some may have geographical restrictions.
